List of Contents

1 LIST OF CONTENTS

Introduction: Meeting the Challenge ...... 3

1. The Reform of the Common Agricultural Policy and Food Safety ...... 5 tabled by Henri Nallet PES Vice Chair, Willi Görlach MEP and Frans Timmermans, MP including comments from SAP ...... 13

2. The European Constitution ...... 17 tabled by PES Vice Chair Giuliano Amato

3. Globalisation: - Europe 2004, Changing the future ...... 21 tabled by high level policy group chaired by PES Rapporteur Poul Nyrup Rasmussen

4. Growth and Employment - Promoting investment, sustainable growth and full employment ...... 41 - Momentum for recovery in Europe promoting public and private investment ...... 55 tabled by Poul Nyrup Rasmussen, PES Rapporteur

5. * Managing migration and integration tabled by Anna Terrón i Cusí, MEP

6. The Roma people: discrimination and exclusion ...... 64 tabled by Jan Marinus Wiersma, PES Vice Chair

7. European party statute: strengthening the Party of European Socialists ...... 76 tabled by Ruairi Quinn, PES treasurer and Antony Beumer, Secretary General

8. PES Working group paper on Sustainable Development ...... 88 tabled by Göran Persson, SAP Leader and Prime Minister

2 9. The PES and SI initiative to rebuild the Transatlantic Partnership ...... 106 drafted by PES Secretariat

10 Europe's new neighbours: A post-enlargement strategy for European foreign . policy ...... 110 tabled by PES Vice Chairs Rudolf Scharping and Jan Marinus Wiersma

* to be distributed at a later date

3 4 Introduction

MEETING THE CHALLENGE

The party of European Socialists is fortunate to have Europe's finest political talent within its ranks.

In the past four years, we have put those talented people to work, turning to them for solutions to the problems that are on modern Europe's doorstep. Working groups of experts have invested considerable energy analysing the challenges and showing how to meet them in accordance with the underlying values and principles that unite us across all our national frontiers.

This volume presents the results of the political energy we harnessed to give voters our vision of a Europe that puts real people first. We offer it as a complement to our manifesto for the European elections of June 2004.

We invite readers to consider carefully the policy options put forward here. We are convinced that we have a coherence and a vision that no other European political family can match - and we believe that our vision is one that will win overwhelming support from the electorate.

Robin Cook, President of the Party of European Socialists

5 6 7 The Reform of the Common Agricultural Policy and Food Safety

drafted by PES Vice-chair Henri NALLET (France), MEP Willi GÖRLACH (Germany) and Frans Timmermans MP (Netherlands) for the PES Presidency

(Document revised after the PES CAP seminar – 14 & 15/10/2002)

Brussels, November 2002

8 9 CAP REFORM AND FOOD SAFETY

Why do we need to contemplate yet another reform of the Common Agricultural Policy ?

 The Common Agricultural Policy has met the aims it was set by the Treaty of Rome: increasing farm output and giving farmers a good quality of life; bringing stability to the market and guaranteeing supplies; and providing food for the people at reasonable prices. The CAP has made Europe one of the great agricultural powers on the planet despite the inevitable and ever-increasing fall in the number of farm workers. But beyond these achievements, the CAP is regularly criticised, especially by developing countries that find it hard to penetrate the EU market with what is often their only possible export, farm produce. This was again the case at the Johannesburg Summit. On top of that, for many years this policy has been in such deep trouble that the Commission proposes further reform in 2002 without waiting for longer term deadlines, in particular without waiting for agreement on a new budget framework in 2006.

 The first reason for reform now is linked to the timetable for agricultural matters: in 2002, the beef and dairy markets must be dealt with, together with a “review” of the decisions taken in Berlin in 1999 when the Agenda 2000 was adopted. Next, the preparation of EU enlargement forces farm policy reforms that take account of the arrival of new member states. Similarly, the new round of World Trade Organisation talks make farm policy reform desirable in order to meet our international commitments. Finally, in 2006 we have to open up the whole question of the EU budget framework. We have little time left to say what we want to do and do what must be done. That is why we believe it is urgent to begin the reform of this common policy that for a considerable period has underpinned our united Europe.

 In addition, mad cow disease highlighted the need for the CAP to better respond at one and the same time to economic, social and environmental demands. This disease sparked a major loss of public faith in the safety of food supplies and threw into question a "productivist"1 system suspected of threatening the environment and lowering food quality levels. It also gave rise to criticism of farm policy decision-making , seen by many to be lacking in openness and scarcely democratic. Such broad-based concern would by itself fully justify reforms aimed at bringing the CAP into line with the expectations of the people and, in so doing, to rebuild trust between farmers and consumers.

 This reform should allow the 15 Member states to give a clear signal to farmers and consumers about the aims and instruments that a new CAP of the 21st century will have. However, we must neither get carried away with ourselves nor try to outwit the people. The nature of production will always be different from one country to another, from one region to another, and it will always be difficult to counteract the fall in the number of farm workers. So, we must reform what needs to be reformed in order to achieve what we might term the best technical and economic scenario for each natural region and each type of production. This will be a form of agriculture that allows the supply of cheap, good quality produce in a way that respects the environment and the well-being of animals whilst giving

1 This relates to the damaging effects of the intensification of agricultural labour by unit of agricultural land. 10 the families involved a good enough income. In short, we must bring the so-called "European Agricultural Model" into line with the expectations of society.

The principles underlying reform

 The CAP remains the first and major common EU policy. Whilst it has met the targets set by the Treaty of Rome, it has also enabled EU integration and has thereby played its part in bringing our economies and our societies closer together. We must bear all of this in mind when we look at questions of reform, when we decide on the long term aims that we might set for our farm sector and when we consider the underlying principles that we want the CAP to match up to.

 In this political perspective, we must be clear about the place that farming, food and the countryside will have in society, taking into account all of the people involved, primarily farm workers and consumers. A problem arises from society's demand for farming to deliver both goods and services – sometimes marketable, sometimes not. Often, society expects agriculture to achieve contradictory results – for example provide food at the highest quality but at the lowest possible price. So for us, seeking the highest possible quality must not lead to such food price rises that we end up with a two-tier system of production – one for the rich and one for the poor – or such high standards that we slam the doors on access to our markets for farm produce from developing countries. Such multi-level expectations often lead to talk about the "multifunctionality" of farming. The idea that agriculture must both guarantee production of marketable goods (farm produce) and safeguard public and non- marketable resources (water, air, the countryside) is now broadly accepted and we in the PES take this on board.

Thus, the PES proposes the following demands and aims:

 Farming must first of all supply most of the produce needed to feed the people of Europe and it must do so in sufficient quantity and guaranteed quality at an acceptable price. Production aims remain at the heart of our collective needs as far as farming is concerned and remain the basis of the farming business. Attaining these aims presupposes increased but better managed output from which farm workers will earn most of their income. Too much price pressure always entails a risk of lower quality and lower farm incomes. We must also take the view that the safety and range of our food supplies remain legitimate and desirable aim in a way that is both flexible and reasonable.

 Indeed, it is important not to close the EU market to imports from other countries, in particular developing countries that really need the access. In our efforts to establish a new basis for relations between the EU and developing countries, we must bear in mind the need to offer them agricultural development aid so that they can improve their structures and have easier access to Northern markets. This difficult balance between our needs and solidarity with countries of the South should be at the forefront of the minds of those in charge of the CAP and should lead to a new definition of “Community preference” which is an outdated concept.

 Agriculture must play its part in meeting new demands concerning public amenities -- water, soil, countryside, health – which our fellow

11 citizens see as essential yet threatened and which they see as being the responsibility of farmers even if farm produce is in no way involved. As a rule, these services do not lead to reward of any sort for the work involved and it is necessary therefore to find appropriate means of recompensing farmers for their efforts in this area, as suggested in the latest Commission proposals.

 Society requires farmers to provide food in good circumstances whilst taking care of the environment and maintaining or restoring control of nature and the countryside. This must lead us to encourage or promote low intensity production methods such as organic farming or extensive techniques such as grass-based beef production. At the same time, we should discourage intensive techniques that have harmful environmental effects and encourage more balanced and reasoned farming methods based on the principles of sustainable development. In other words, we must reform all areas of the CAP and all of its market sectors in such a way that without sacrificing efficiency it responds better to the qualitative demands of consumers. The new buzzwords of the CAP will therefore be:

 Quality that can be verified at all stages of production;  Price s that allow everyone to afford quality produce;  Respect and protection for the environment.

This will be a long and difficult task, all the more so because this reform will of necessity be subject to a certain number of constraints.

Constraints upon CAP reform

 The first and simplest is budgetary constraint. The budget framework is fixed until 2006. This question cannot be reopened and it is therefore a simple fact of life that whatever reforms are made to the CAP between now and then – and however great they may be – they must fall within the margin for manoeuvre agreed at Berlin.

 This constraint could turn out to be difficult to manage in the coming reform if some of the subsidies now used to provide compensation for price falls will in future be used for rural development (the so-called second pillar). In fact, these subsidies are not unrelated to structural aid for hard hit rural areas or grants to support cohesion policies. We must therefore bear in mind any tendency towards divergence or convergence in the two common policies. The CAP must play a renewed role in the Union's efforts at redistribution of wealth, using the opportunities offered by fixing ceilings, or reducing the level of subsidies, to ensure greater justice for farmers. This trend towards a fairer distribution of subsidies is included in the Commission proposals and can only be shared by the PES, even if its implementation needs to be further discussed.

 The second constraint is linked to the EU's international obligations, which require that any reform of the CAP be in line with WTO agreements. We have therefore undertaken to reduce both direct production aid and export subsidies. One could easily imagine that a new trade round will endorse this approach and it is therefore vital that the coming reforms do not fly in the face of WTO undertakings. We must expect new demands during this trade round, such as improved access to our markets for products from developing countries. So that this issue does not become a dead letter, we must give these countries support, in particular through increase development aid, so 12 that they can bring their production systems up to the standards laid down by the EU.

 The third constraint is linked to enlargement. The time is drawing near when the candidate countries will finally participate in the CAP. Reform now to market organisation and to subsidies for farmers must anticipate what CAP will be with 25 Member States.

Outlines of future reform

If we accept the above and face up to society's new needs and the constraints that weigh on the CAP, the PES proposes a five-point reform of the CAP:

1. Re- think and reorganise farm production systems under which intensification by the acre and use of artificial inputs create real environmental risks. First and foremost, this affects intensive livestock farming. We must limit their concentration and master their effects, especially in the pork and poultry sectors and, to a lesser extent, in the dairy sector. Special programmes must be devised to target the areas most affected. At the same time, we must encourage more extensive, grass- and vegetable protein-based livestock schemes. Such production methods give us quality livestock and use the countryside in an acceptable manner. They meet the new demands in a satisfactory way but they assume that farmland is plentiful and cheap. Despite the political problems that might arise from such a policy re- think, which we have already lived through with the nitrate directive, it must be done without delay so as to send a clear signal to both farmers and consumers. Similarly, production of vegetable protein, avoiding the use of animal meal -- and over-dependence in the case of some countries -- must be encouraged.

2. Impr ove the qualitative performance of all production sectors

Consumers want all farm produce to be better and safer and they will not be fobbed off with a few measures in support of organic farming that in any event could never supply more than 10 or 15 per cent of our needs. All production methods in all sectors and in all regions, whatever the size of the farms, must therefore be encouraged to adopt better-controlled, more eco-friendly production systems, so combining efficiency with quality. Such a committed redirection towards sustainable development should involve all EU research centres so that we agree upon valid and acceptable certification systems. It is also appropriate to stress that society's new demands on farming arise from achieved advances in science and technology and not from some mistaken, backward-looking choices. This effort, to which all farmers must commit themselves, is the best guarantee we have for safeguarding the single market within the CAP – the EU's major achievement. This reform of production methods must also lead to reduction in production aid, the CAP's first pillar, in addition to gradually lowered or modulated payments, in the spirit of the recent Commission proposals.

3. Tr ansfer some direct aid to rural development (Second Pillar).

The management of this sustainable agriculture that supplies farm produce and cares for natural resources can be carried out in part under the second pillar of rural development. But we must review the second pillar with a view to enlarging its scope and making it more flexible so that it supports good agronomic practice in all the major 13 production sectors depending upon their environmental efficiency. Thus, some aid for farmers will be for what we might call environmental services rendered. The renewed second pillar would be financed by the simplified modulation or, better, reduced subsidies for produce and, if needed, by transfer from one pillar to another.

This switch of some subsidies towards a "green box" must however allow us to maintain production aid -- necessary to ensure continued output -- in the form of intervention mechanisms or safety nets according to the different needs of different market sectors. This realignment of the aid system to meet multiple objectives might be easy to understand but it is extremely difficult to put in place because it requires us to draw together agronomic expertise (finding the most suitable systems or combinations for these different aims in the various farming areas), economic expertise (fixing the right levels of aid to ensure continued production with these new constraints and bearing in mind market prices) and administrative expertise (putting forward good administrative practices that safeguard both flexibility and sound management). From this point of view, the proposals still require expert opinions and impact studies in order to assess the right levels and the real effects of decoupling on farms in the different regions of the European Union

This task, responsibility for which cannot be handed over to the Commission on its own, must link public and private research and the numerous professional bodies already active in this area in order to reach as wide a consensus as possible as to what the "new European agricultural model" should be. Finally, we might consider that this realignment would enable the resolution of certain political questions that we have already run into. In fact, the second pillar already allows co-financing, which in this new approach would necessarily become more significant in scale, reducing in proportion the national contributions. On the other hand, this new aid system might be more easily available for new member states than the present one and would therefore allow the candidate countries to modernise their farm sectors around these new production methods.

Similarly, when some measures linking Community financing with national co-financing, could be improved by increased Community involvement through transfer from the first to the second pillar, the amount of co-financing could be proportionally reduced, thus helping the proposed realignment on its way and underpinning the dynamics of the system.

4. Fu rther increase the integration of CAP management.

It is in the area of farm policy management that we can draw the consequences and the quickest lessons about the mad cow crisis. We must first of all set rigorous standards to ensure the tracability of produce and guarantee its quality for consumers. The European food safety agency will have a key role to play, along with the different scientific committees, in developing this point. But, essential political decisions on reform must not be paralysed by conflicts of interest between member states. That is why we believe that it would be appropriate for the European Council itself to set up a programme of regulations and directives -- for adoption by qualified majority voting in co-decision with the European Parliament – as well as a timetable, in the same way as was done for the creation of the single market. We must make it clear to public opinion that if Heads of State

14 and Government do not take this political responsibility, there will not be a CAP reform on the scale that we want. Finally, we must create a genuine and powerful monitoring authority under the responsibility of the Commission as guardian of the treaties. This authority will have the means to do its work and above all will have the power to impose heavy sanctions on member states that fall short of the standards set down. We saw it with mad cow disease: it was the national and European monitoring systems that were much more to blame than decision-making systems. We must be rigorous and demanding in this area even before enlargement because we know what is at stake.

5. Dec entralise CAP management.

In this reform of the CAP it is obvious that the aims and objectives of rural development policy – the second pillar – must be entirely re- thought. But we know that the specific features of an agricultural policy directed towards and by sustainable development will not be determined in Brussels nor even in Berlin or Paris, but on the ground, among the people involved in it. This is why it is important to give proper room for negotiation on the policy's aims and details to the regions, or the Länder, under the direct or indirect control of the Commission and Council. This decentralised task will ensure that the reform is taken on board by all involved. In addition, it will become acceptable for decentralised groups to be involved in co-financing of the second pillar and will give an extra boost to local or regional produce. Finally, in this attempt to engage everyone involved in defining the new CAP, we must ensure a better decision-making role for the national and European parliaments, in full respect for the powers of the Commission and Council.

CONCLUSION

These five broad political guidelines remain within the international and budgetary constraints. They outline a new CAP framework that is in line with the expectations of consumers and acceptable to farmers. They are not in contradiction with the Commission proposals, even if they do differ on several aspects. But they already make up the coherent body of proposals that European Socialists intend to put before the citizens and leaders of the Union as the debate on CAP reform is now open.

15 The presidium of the PES Cc. PES member parties

Re: PES-paper on the Common Agricultural Policy

The PES presidium has for a long period of time discussed the future agricultural policy of the European union. A paper has been written but has not been adopted by the presidium due to disagreement on its substance. As I have been rather critical to the draft report I will hereby give my reasons. Let me first underline that there are many good proposals for reforms of the CAP in the paper, but it leaves the fundamental structure of the CAP unchanged. The Swedish Social Democratic party is very critical against the CAP and we demand fundamental changes of the system.

1. Most important is to get rid of the old thinking of having production aims for the agricultural production. It was reasonable that Europe after WWII concentrated its effort on increasing agricultural production to be able to be self- supporting. But today, when the European Union produces more agricultural products than we are able to consume, the production aims are no longer necessary; on the contrary, they create problems, not least very high costs. Instead, we ought to focus on consumer demand. For us as social democrats the interests of the consumers should be our first priority. An agricultural system, which brings both higher prices and excessive production, is not reasonable to retain. 2. We must also stop counteracting the development policy of the European union. We must get rid of trade barriers that make it impossible for the countries of the Third world to sell their agricultural products on our markets. We should not pay subsidies for exporting our agricultural surplus outside the Union, thereby distorting competition on world markets. When we with our trade and agricultural policy disenable Third world countries to develop their potentially strongest line of production – agricultural products – we undermine both our overall goal of sustainable development for these countries and our ambition to give self-help. This is not something that can be solved through development assistance for improving agricultural products in poor countries. The real question is: how do we allow them to compete on our markets on equal terms? 3. The necessary reforms of the CAP must also deal with the surplus of farmers that must be supported into other jobs and activities. A changed CAP will free recourses that can be used for rural development and development of other forms of production (craftsmanship, tourism, decentralised official institutions, IT-technology etc) in rural areas. In addition to that, ordinary agricultural production creates “collective commodities” in form of open landscapes, a better environment and better conditions for tourism and recreation that farmers of course should be economically compensated for. Furthermore, some agricultural production, for example ecological production, could have special subsidies to be able 16 to be competitive on the market. So, as I see it, agriculture must be a sector of rather deep involvement of EU also after a fundamental reform of the CAP. Of course we must also have legislation to guarantee for example food-safety. Lena Hjelm-Wallén

2001-06-18 Diskussionsunderlag

Common guidelines for a new European food policy

A reform of the Common Agricultural Policy must to a higher extent be based on consumer requirements of safe food and a sustainable development. It is therefore essential to discuss new objectives for a common European agricultural policy. The present CAP sets out no less than five different objectives that are partly contradictory and build on conditions that applied 50 years ago. Under the Treaty of Rome, agricultural policy shall have the following objectives:

- High productivity - A fair standard of living for the agricultural community - Stable markets - Availability of supplies - Reasonable prices for the consumers

It would be an advantage to reduce the number of objectives to a single overall objective for agricultural and food policy. An objective should be simple, clear and easy to comprehend and memorise. The following aspects should be taken into account in the formulation of a new objective:

 Future policies must to a higher extent be based on consumer demand and reasonable preconditions for agricultural companies to act in a highly competitive market. At the same time it is important to emphasise society’s overall responsibility for long-term development.  The food offered to the consumers should be safe from the health point of view. It is the companies that should be responsible for ensuring that food that is harmful to consumers’ health is not released onto the market. Society must by means of legislation formulate certain basic requirements regarding the quality of foods. Each link in the food chain, from the soil to the dining table and back to the soil, must be safe.  The agriculture and food sector is important in the transition to an ecologically sustainable society, since all agricultural and food production presupposes a resource-efficient and environmentally adapted use of natural resources.  A long-term policy will create the preconditions for competitive and robust agricultural and food companies to act on market terms and thereby ensure a development that is economically sustainable. Continued structural changes must be effected in a socially sustainable manner through an integrated rural policy as a complement to the common agricultural policy.

17  The common agricultural policy must contribute to the improvement of global food safety in accordance with the Rome Declaration on World Food Security and World Food Summit Plan of Action.

On the basis of these principles the following proposals for goal formulations can be discussed:

The objective of the common agricultural and food policy is ecological, economic and socially sustainable production that builds on society’s overall responsibility, consumer demand and a holistic view of the food chain.

Guidelines To reach the overriding goal it is proposed that the EU follows these guidelines:

1. L ong-term reformation in a socially acceptable manner The current agricultural and food policy is complex and difficult to grasp and should be simplified and deregulated in a socially acceptable manner. Specific guidelines are needed to preserve agriculture in less privileged areas and in mountain areas. The production of collective commodities such as environmental services can also contribute to new or continued activity in agricultural enterprises.

2. An integrated policy for rural areas Reform of agricultural policy frees resources that could be used to a greater extent than today for rural development and the development of regional trade and industry. The aim is to facilitate the restructuring of agriculture and create new jobs in rural areas. To achieve regional balance and thriving rural areas an action programme is needed that will create the conditions for a differentiated business sector and integrated development of the entire countryside.

3. Envi ronmentally sustainable agriculture A change in agricultural policy presupposes extensive forms of production and the promotion of ecological production. Conventional agriculture should also satisfy environmental requirements.

4. I ncreased food safety Food legislation based on scientific assessments is required to ensure and define the basic quality and safety of food. In the case of uncertainty it is particularly necessary to apply the precautionary principle. Smoothly functioning control and supervision are needed, as well as adequate information to the consumer on the contents and origin of products. The issue of establishing a European Food Authority is a crucial one.

5. Animal-f riendly production / Sound animal husbandry in production

18 Good animal husbandry and stock farming is a decisive condition for long- term, sustainable and ethical food production. Exacting demands are called for regarding animals, protection against infection, health and the consumer. Production methods that satisfy exacting demands on stock farming can often provide a competitive advantage. At Community level there is a need for improved provisions pertaining to the protection of animals which should be based on the animals’ biological needs and natural behaviour.

6. Glob al responsibility The EU's agricultural policy affects the rest of the world as a result of border protection, export subsidies and high subsidies to agriculture within the EU, which leads to low world market prices. This is one of several factors that contributes to a low production of agricultural products in developing countries. By reforming its agricultural policy and liberalising trade, the EU could promote a positive development in the developing countries.

7. Equ al opportunities for women and men A new European agricultural policy and an integrated rural policy must help to create equal opportunities for women and men. Special attention should be devoted to a social structure that makes it possible for young women to remain or settle in rural areas.

8. A review of Community rules and the principle of subsidiarity A prerequisite for a common market is a common food and agricultural policy. The need for similar competitive conditions and common rules indicates this. When the food and agricultural policy is reformed, it is desirable that the possibility be examined of a different division of responsibility between the EU level and the national level. If support were primarily given to the production of collective commodities within the framework of an integrated rural policy, it would be possible for individual countries to organise support better adapted to their needs.

9. I ncreased information, educational, research and development activities For reasons of public health, society should have the task of improving consumers' knowledge of food products through information and educational activities. Initiatives in the fields of research, development and education are other examples of measures that are needed to facilitate the transition to a new food and agricultural policy.

10. A policy for enlargement A reform of the agricultural policy will make it easier for the countries of Central and Eastern Europe to join the Union.

19 20 21 The European Constitution

drafted by PES Vice-chair responsible for constitutional affairs, Giuliano Amato

Brussels, April 2004

22 23 The approval by the Convention of the draft Constitution for Europe in July 2003 was an undeniable success for our political family. The document does not entirely reflect our ideas, we had to accept compromises and some of our proposals were not accepted. Furthermore, we did not agree on everything and in particular, some organisational issues, such as giving the European Council a long term presidency, reducing the membership of the Commission and adopting a new system of majority voting. The positions in our family were influenced by our diverse national interests and by our diverse institutional roles.

However, there is really nothing substantially socialist in the alternative solutions to issues of this nature. We stood united as socialists with regard to the new ambitions and aspirations of Europe, on the accountability and transparency of her institutions and on the rights to be conferred to its citizens. On all of these issues the effort to co-ordinate the entire membership of the family - from those who represented national governments to the European and national parliamentarians - was indeed successful and allowed our positions to have a powerful impact.

The draft Constitution embodies remarkable changes and most of them have a socialist imprint. Equality is one of the basic values (on the same footing as liberty); peace is the first objective, the objective of a competitive market remains, but within the framework of a social market economy, growth becomes sustainable development and the aim to a high level of employment becomes the aim to full employment. Equality between men and women and the protection of children rights are no less important than the traditional economic and social goals. While the set of goals for Europe as a global actor is entirely renewed. Security rightly remains as a paramount goal, but it is accompanied by the eradication of poverty and the protection of human rights, free and fair trade and the rigorous compliance with International Law and with the principles of the UN Charter.

Nor have we limited ourselves to working on new goals. In the policy area, we wanted a better safeguard of the specific features and aims of public services; and we obtained a legal basis for a future European law entitled to set the principles for such services to be applied in the whole Union. We wanted social policies not to be the daughters of a lesser God vis à vis economic and financial policies; and we obtained a clause by which they will have to be co- ordinated with each other. We wanted the Lisbon process to receive explicit recognition; and throughout the third part of the draft the open method of co- ordination by which the process is implemented, has been recognised.

Simplification of instruments, access to documents and publicity of legislative works, more transparency and more accountability, and finally the incorporation of the Charter of the Fundamental Rights, were crucial goals that we successfully shared with others. But we fought hard for them (even if it was not easy for our British friends and comrades to eventually accept the Charter), for what is good for democracy is also good for the socialists.

After months of inconclusive negotiations, the prospect of having the Constitution approved by our Governments in June under the Irish Presidency is becoming real. We support this prospect and will ask our electors to support it. The enlarged Europe needs the Constitution, for it needs the new horizons described above and it also needs procedures and institutions that can deliver decisions, cohesion and continuity. Without the Constitution our aspirations would remain unaccomplished and sooner or later the grouping together of Member States would result in the division between older and richer Members on the one side and newer and poorer ones on the other.

24 We are aware that a difficult process of parliamentary ratification and, in some cases, of national referenda will have to be confronted before the Constitution acquires legal force. We are ready to confront it, not on behalf of Europe as it stands but in order to construct a new Europe, we need to face the challenges of the new century.

A Constitution is nothing more than a document, albeit with legal force. But its values, its objectives and its procedures may be precious levers for future political action. The values, the objectives and the procedures of this Constitution are the very levers upon which our future political battles can safely rely.

25 EUROPE 2004 CHANGING THE FUTURE

tabled by high level policy group chaired by PES Rapporteur, Poul Nyrup Rasmussen

Brussels, February 2004

26 27 28 Executive summary

Globalisation is a formidable challenge to the future of our planet, presenting us with both opportunities and risks. If we allow it to follow its course as a largely ungoverned phenomenon, it stands to undermine the integrity of democratic Nation States and the political systems on which they are based, as well as threatening the sustainable and balanced development of the world in human and environmental terms.

Europe and the world are faced with crucial commitments over the coming years. Ensuring fulfilment of the Lisbon objectives for a dynamic, competitive, social and sustainable Europe in the world economy; Making an enlarged Europe strong and cohesive; Attaining the UN Millennium Goals; Reforming the system of global governance and of the United Nations.

This demands creating a new political will for regeneration and change in our policies and our governance structures.

The Party of European Socialists and its member parties wish to take globalisation back into the hands of democracy and the people. Through our common endeavours we will show that the current course of globalisation can and must be changed in the interests of European citizens and the world.

This political declaration lays down the universal values on which we believe globalisation must be based, the vision with which we must shape and master it, and the means which we must employ to govern it in the interests of all peoples.

In the run-up to the 2004 European elections, we propose a new and ambitious political vision for Europe and the world.

The following five objectives constitute the pillars of our political vision at all levels of governance, national, European and global:

. Securing people's living conditions; . Preserving the environment and sustainable ways of living; . Fostering peace throughout the world in the face of old and new threats; . Managing migration throughout the world, regulating labour migration, upholding the right to asylum, and achieving economic, social and cultural integration for immigrant populations in Europe . Promoting democracy at all levels, re-establishing a strong link between citizens and politics and reinforcing the capacity of public authorities to implement democratic choices, particularly at global governance level.

We propose a coherent programme, for the national, European and global decision-making levels, of how to achieve these objectives and reform globalisation, through better policies, better instruments, co-ordinated action, and by changing the fundamental framework of global governance.

Social democrats hereby assert their commitment to transform globalisation into a force for human progress. Humanity has the means to achieve this vision. It is up to us to make it a reality.

I. Introduction 29 In the absence of immediate political action at all levels and radical reform on a global scale, current globalisation will result in a deeply divided world between the rich and the poor, zones of peace and zones of war. This failure of badly governed globalisation would lead to profound disorder and discontent among peoples, stimulating extremist attitudes, new conflicts and ever-greater insecurity.

Europe cannot remain on the sidelines, faced with these changes. It will not succeed in ensuring its own peace and prosperity under the illusion of its own power to sidestep the ever-worsening global situation. Quite the opposite. Given its political, economic and cultural weight, as well as its unique experience of shared sovereignty among states, Europe holds one of the keys to a better future for the planet. Europe cannot do this alone, but neither can this be done without a positive European contribution.

Globalisation is not a distant phenomenon, but plays an ever-greater role in our everyday lives. Directing it to the benefit of all, not just a few, has become a crucial political challenge for governments at all levels and all those striving for a new, better world order. Globalisation is seen as a source of new wealth at the same time as fostering fears for the future. While globalisation, if properly managed, could take us into a new era of shared prosperity this century, today it seems to be a destructive force in many ways: rapid de-industrialisation and socio-economic changes in Europe, pressure exerted on our social security systems, exploitation through trafficking and illegal immigration, international terrorism, cross-border criminality, regional conflicts, arms proliferation, environmental threats, persistent poverty and misery in the developing world, and a weakened multilateral system.

For the first time since the Second World War, Europe is confronted with a future that seems worse than the present. Pessimism, if not fatalism, has taken hold of many, not least among those who are less equipped to cope with change, notably the less well-educated. Insufficient and volatile economic growth threatens job security and undermines our social security and pensions systems. This results in a general feeling of insecurity and fear for what the future may bring. The idea that we are heading for an increasingly insecure, difficult, individualised way of living has become commonplace. We perceive a globalised society as one in which individuals can only rely on themselves, counting on nothing but their own means to succeed, failing which they are marginalised and deprived of a future. This contrasts strikingly with our experience in Europe since it follows decades of successful European integration and social progress, with the consolidation of these gains in our societies. This is further compounded by the negative impact of economic globalisation on the quality of our environment and the increasingly unsustainable patterns of our production and consumption.

Our citizens are asking themselves - Is the company I work for going to move its production to a lower-wage country? Will my skills still be in demand in five or ten years' time? Is my children's quality of life in future going to be at least as good as mine is today? Is the world becoming a more dangerous place? Is air pollution and other environmental problems going to damage my family's health? On all of these issues, they are questioning the idea of progress, which is one of the fundamental values for social democrats.

In such a world, politics is losing its legitimacy as individual Nation States steadily lose their power to act. It is democracy itself that is undermined 30 through these developments, leaving the door open to all sorts of political perversions. The quality of human life deteriorates because it cannot be maintained at the same level by using old formulas in this new political context. Citizens feel abandoned by politics, either because they feel it can no longer govern effectively, or because they suspect that it no longer cares about their everyday concerns.

The Party of European Socialists and its member parties refuse to accept this fatalistic vision. We are convinced that globalisation can and should be managed and directed in the interests of Europe and its citizens, as well as those of the world, and that new guarantees can be provided to secure our quality of life. Experience has shown we can change for the better. Globalisation will present new opportunities for growth and human development, provided it is properly regulated. As social democrats,; we have a reformist vision and programme with regard to globalisation.

Political action and the values that inspire it should take centre stage again in order to forge a democratic future based on the predominance of politics over economics. Globalisation should not entail the degradation of our living conditions, whether we live in rich or poor countries. On the contrary, globalisation can and should serve the public interest. To achieve this everywhere demands a new political approach, through which we must act at all levels: on the local, regional, national, European and the global.

It is by means of this political declaration that we wish to express our absolute determination to act. The vision of social and economic progress that has inspired our parties' actions in their Nation States should also find an expression on the European and world stages today. Therefore, we propose a new and ambitious political vision for Europe and the world.

II. Universal values

All political action must be guided by a set of fundamental values. Globalisation effectively challenges a number of values at the heart of the Nation State, such as equality and solidarity between peoples. It boosts the ever-more aggressive effects of international competition and it weakens the state's ability to take action, to the benefit of other governance levels and actors. In this process, we are losing the importance of the shared values at the core of the democratic Nation State. In the national context, our parties have known how to give political expression to their citizens' aspirations in the past, securing the real quality of human life. We based ourselves on clear values to achieve this. Today, these aspirations cannot be satisfied by acting exclusively at national level, but must be pursued at European and global levels.

It is vital for us to re-establish and reassert certain values, not only within Nation States, but also in Europe and at global level. These universally recognised values should then serve as guiding principles for the reforms and policies needed to govern globalisation. For socialists and social-democrats these universal values are equality, freedom, peace, respect for Human Rights and human dignity, gender equality, democracy, social justice and solidarity among generations and peoples, respect for cultural and religious diversity, the quality of human life, and a collective sharing of responsibility between individuals, public and private actors.

These values constitute rights. The members of the European Union recently adopted a Charter of Fundamental Rights, including dignity, freedom, equality, solidarity, citizenship and justice. A similar process is necessary at global level. The global community embodied in the United 31 Nations should elaborate a World Charter of Fundamental Rights, based on existing international texts. In this way, every human being in the world, wherever and however he or she may live, will possess universal rights that the Member States of the United Nations would be bound to respect and uphold. Furthermore, an International Court, modelled on the European Court of Human Rights, would be responsible for ensuring the respect of these fundamental rights and protecting individuals from arbitrary state action.

In addition to their legal value, these universal values must inspire the objectives and political agenda and actions of the international community, governments, economic decision-makers and civil society alike. The values we uphold have inspired the proposals contained in this declaration. They are part of the age-old conviction of our political family that values like equality, social justice and shared welfare should guide, anchor and give meaning to economic progress and wealth creation. This conviction has been that of our Nation States throughout the last century. It continues to be so at European and global level. This gives us the strength and heightened capacity to tackle the great challenges of our age, to propose a new political vision and to build a better future, more than any other political movement.

III. A new political vision for Europe and for the world

At the dawn of this new century, the human race faces a new common challenge: building a new and sustainable world, based on peace, prosperity and stability. We share a common future that we have to shape together in the face of egoism and nationalism. Politics needs to re- establish a strong connection with citizens by leading the way to a better world for us all. In this way citizens will regain their confidence in the ability of politics to shape the future, not only by finding their way back to the ballot, but also by actively engaging in debate, making the choices necessary for political action. This strong interaction between politics and the citizen is needed more than ever before because it is the very foundation of our democratic system and a guarantee of policies that meet people’s concerns.

A strong political agenda has become vital for Europe, subject as it is to profound change in a globalised world. Europe is entering a crucial moment in its history. With enlargement, it will soon represent a regional grouping of 25 states, made up of 450 million people, generating a quarter of world economic activity. In this sense, Europe represents a major economic and political force in the world. At the same time, this force appears fragile. In political terms, Europe loses a large part of its influence to the benefit of other actors due to its internal divisions on the current big international questions. In economic terms, Europe is engaged in a frenetic race of intense international competition, the result of which will depend on the quality and successful implementation of European policies.

Europe needs to succeed in both politics and economics. These should be closely linked and mutually reinforcing. In order to achieve this, Europe needs to champion a new and ambitious political vision that reflects its political weight and the global economic challenges it faces. Europe needs to enter a new period of closer co-operation between its Member States, of pooling and sharing sovereignty, whether it be on foreign policy, economic and social policies, or other related areas. In this respect, the new European constitution should lay the political and institutional foundations for this new agenda. It is by acting at European

32 level that states will regain the national capacity for they have lost, not the contrary.

In addition to arming itself with a strong political vision to secure its own future, Europe should develop a strong vision to champion on the world stage. In short, Europe needs to act on all levels, Nation State, European Union, and global, in order to achieve these objectives, in the framework of a coherent global vision.

The following five objectives constitute the pillars of our political vision at all levels of governance, national, European and global:

IV. Policies to face the challenges of the 21st century

First Goal - Securing people's living conditions

A whole range of policies must come together and be made coherent on the national, European and world levels, in order to secure the quality of human life in a globalised world. The most important of these are employment, social, economic, environmental, and development policies. The progressive opening of world markets and the increase in international exchanges have been an undeniable factor in enabling European growth over the last decades. Nevertheless, this opening-up has also increased international competition and the pressure on our social and fiscal systems. It has also accelerated industrial change and corporate mergers, often at the expense of jobs in the sectors concerned.

In future, most people will have to change jobs, even their set of skills, at least once in their professional lifetimes. It is increasingly rare to stay in the same job for the whole of your career, without having to update your professional skills. On a human level, the rapid evolution of skills, the shift of demand for labour between sectors and the demand for ever- higher labour productivity have created an insecure, unpredictable and highly demanding socio-economic environment.

In a world open to competition and in which technological innovation and adaptational skills are essential elements for success, it would be a mistake to think that we could go back in time. In other words, we cannot ignore a reality that imposes itself on Europe as much as on the rest of the world. However, it is the responsibility of governments to manage these evolutions on the basis of two criteria: enabling individuals to benefit from change and protecting individuals from the negative effects of economic change by maintaining high social standards.

33 We will have to formulate new ways to secure people's living conditions and working lives, allowing for flexibility grounded in security in the midst of this globalised, fiercely competitive and changing economy - based on the ability to welcome change for its promises, rather than the stability of stagnation. In other words, while we are pursuing greater flexibility in the labour force, the social and economic system within which we work must provide a high degree of security. It is the responsibility of both the public authorities and each employer to provide such security, to the mutual benefit of employers and employees.

To a large extent, the European Union and its member states can address these challenges based on a full and effective implementation of the so- called Lisbon Strategy defined in the year 2000. This strategy is the only available policy route if the EU is to succeed in facing the challenges ahead. The Lisbon European Council set this new strategic goal for the European Union by 2010 - to "become the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion". Achieving this goal requires an overall strategy aimed at:

- preparing the transition to a knowledge-based economy and society by better policies for the information society and R&D, as well as by stepping up the process of structural reform for competitiveness and innovation and by completing the internal market; - modernising the European social model, investing in people and combating social exclusion; - sustaining the healthy economic outlook and favourable growth prospects by applying an appropriate macro-economic policy mix.

The fifth year of the Lisbon strategy is marked by a weak performance of the European economy, with low growth and rising unemployment. So far, only parts of the strategy's political agenda and guidelines defined at EU level have been implemented by member states at national level.

More and better jobs

Above all, we must adopt and foster policies suitable for creating a sufficient number of quality jobs. Our nation states and the European Union must do more, not less, in a globalised world. Equally, social partners at national and at European levels (i.e employers and trade unions) must be encouraged to play a very active part in supporting and in enabling such policies.

Modern education, vocational training, life-long learning and family policies are needed more than ever before. The EU is already trying to co- ordinate the efforts of its Member States through the Lisbon strategy. Nevertheless, the current efforts of a number of countries have been inadequate in this field, putting the very future of their citizens at risk. This is in spite of the fact that these are political objectives that are in the general interest of the EU and its citizens. It is vital to redouble our efforts in these areas throughout Europe.

In this context, an all-important challenge will be raising the employment rate of the working age population, particularly among three groups: women, older workers and the disabled. This is not about forcing people to work, but about creating the most favourable social, fiscal and professional training environment to help all those who are willing to play an active part in the labour market to actually do so. For women, an active labour policy reconciling work and family life through adequate child care provision, effective gender equality policies and regulations and easy access to appropriate 34 education, training and re-training schemes is needed. Similarly, effective vocational training and retraining policies suitable for older workers and for the disabled are now vital.

A renewed social policy

Our social security systems must be renewed in light of current and future challenges. However, we should refuse the rolling back of the Welfare State, under the guise of modernisation. This would mean the break-up of social cohesion and the progressive erosion of our hard-won social rights, gained in the post-war period largely thanks to the efforts of socialist and social-democrat parties. In other words, we must eliminate all unfair competition between the national social security systems of our Member States. The renewal of our social systems should provide the basis for reinforcing the quality of human life. We must always re-affirm that efficient public services and social security systems are a competitive advantage, not a burden on our economy.

Globalisation entails a dangerous challenge, of which we should be fully aware. Under the relentless pressure of international competition for markets and investment; and in the absence of a new policy approach - even social democrat governments may have no choice other than to lower social security benefits and social standards in order to maintain growth and employment. We cannot accept such a development.

The same poisonous logic prevails in fiscal policy, particularly in the area of corporate taxation, which threatens to decimate the financial resources of the Welfare State. In the absence of close co-ordination between the Member States of the European Union in these two areas, how can we hope to maintain a high level of social standards across Europe in decades to come? Co-ordination between Member States has already begun in the framework of the European social agenda. However, the most important part of this work is still to come. It remains one of the greatest tasks for the next European legislature.

A more co-ordinated economic policy

It will be difficult to develop these policies in the recent context of economic pessimism in Europe. It is essential for us to regain the path of ever- stronger and more sustainable economic growth, if we are to maintain the welfare of all European citizens and strengthen Europe's role on the world stage.

These questions lead us to examine the reasons behind our weak economic growth. A cause of our economic torpor is the failure to effectively co- ordinate our national economic policies, which is even more startling given the fact that we now have a single monetary policy in twelve of our Member States. Economic policy cannot simply be limited to monetary policy and controlling budget deficits, although strong public finances, in order not to export trouble to other countries and in order to handle economic shocks are a pre-requisite for sound economic policies fostering growth.

In addition to greater co-ordination of our social policies, real economic co- ordination represents a crucial task for Europe in the next legislature. Over the next few years, Europe must ensure higher levels of investment in education, research and infrastructure, through a common, sustained effort amongst Member States, in the context of an ambitious European stability 35 and growth programme. In order to achieve this, we must establish a close link between the Growth and Stability Pact, which frames national budgetary policies, and the Lisbon strategy, in the relevant areas.

Higher investment achieved in a co-ordinated manner among member states will increase economic growth and employment considerably. A study recently commissioned by the PES indicates that higher and co-ordinated investment in infrastructure, research and human capital across the EU would increase growth by almost 1 percent per year in the period 2005- 2007 and an additional 0.5 percent per year up to 2010. This additional growth would create at least 3.4 million new jobs. This can be achieved without a negative effect on national budgets, as increased spending in the public sector would be more than outweighed by increased public income from taxes and public savings given a reduction in social benefit expenditure. In this context, we want to promote a reform of the Growth and Stability Pact, in order to strengthen public investments for the future.

A more ambitious development policy

In addition to Europe's internal policies, in a globalised world, the prosperity of a region as large as Europe can no longer be conceived without a global development policy, which is at present grossly inadequate. Such a global development policy must combine a set of policies affecting development, including trade, investment, the provision of education and health services, as much as more development aid and more effective development policy as such. In the absence of such a set of policies, the fulfilment of the United Nations Millennium Goals for 2015 will not be possible.

In this context, aid to developing countries is no longer just a question of ethics. This aid, in the broadest sense of the term, must be regarded as a way of securing the quality of human life in Europe as much as in developing countries, particularly in the poorest amongst them. In order to be effective, aid should:

. Be part of a comprehensive policy approach to development. This applies above all to trade policy. Following the failure of Cancún, trade negotiations should be started again with greater attention paid to the fight against poverty. Narrow self-interest continues to undermine the Doha Development Round, as in Cancún. We recognise that a systematic liberalisation would be against the interests of the majority of the poorest countries; however, developed countries should open their markets, particularly for agricultural goods. In this context, Europe must address the need to reform the common agricultural policy to end protectionism.

. Be raised significantly. Financial contributions in development aid remain strikingly lower than what is recognised as needed. The 25 year-old objective of 0.7% GNP of developed countries for development aid has still not been reached. The European Union, while being the world’s primary contributor to development aid, has not even reached half of that figure. Moreover, the Millenium Objectives agreed in the year 2000 by all the Member States of the United Nations demands at least a doubling of international aid. Europe should raise its aid substantially by setting targets for the achievement of the 0.7% objective by 2010. This additional budgetary effort will be facilitated by a more growth-oriented economic policy in Europe, as outlined above.

36 . To be completed by substantial efforts with regard to the debt of poor countries. Significant measures must be taken to alleviate and, over time, to cancel the debt of poor countries. Debt represents an obstacle to development and to the financing of essential policies, such as the fight against poverty, health, education or the access to water.

. The prevailing “Washington consensus” must be replaced. A sophisticated and more diverse approach to development policy should take account of people’s social needs, the importance of education and vocational training, the need for real employment policies, the essential role of efficient public services for all, the consolidation of public administration and the national legal framework, and legislation to protect the environment and natural resources.

Faster sustainable and environmentally-friendly social and economic development in developing countries is justified on human grounds. At the same time, this development will contribute to stabilising the planet, eliminating armed conflict, controlling migratory flows, and rendering the fight against trafficking and arms proliferation more effective. Furthermore, this development will progressively open up new markets to the European economy, contributing to growth and job creation.

This is at the heart of our profound conviction that there is a positive and dynamic link between economic growth and an adequate re-distribution of new wealth. We have always applied this principle in our Nation States and in Europe through the Structural funds and regional policy. Today this principle should increasingly be applied at global level. It is in the spirit of the Millenium Objectives that the development of poorer countries should, from now on, be at the heart of the international agenda of the developed world.

But do even the richest countries have the budgetary means to provide what we now call “global public goods”, given the tremendous financial demands of concerns such as the fight against poverty, AIDS and other diseases, access to drinking water, infrastructure needs, peace and security operations?

We think not. For this reason, a serious international discussion has to take place on where to find new innovative sources of financing, independent of national budgetary constraints. The idea of an international tax continues to gain ground and should be explored, such as a tax on speculative movements of capital, on CO² emissions, or a global tax on multinational corporate profits.

Within this new development framework, strengthening social standards in developing countries takes on a new importance as a means of securing the quality of human life. European countries, and other rich states, need to commit themselves politically and financially to faster, more sustainable development in developing countries. However, such a commitment cannot be conceived without a substantial effort on the part of developing countries to link economic progress closely with social progress. It is in the interests of both their citizens and our own.

In other words, globalisation should cease to be a social battlefield that harms workers everywhere. There are two ways of doing this: consolidating the role and competences of the International Labour Organisation, equipping it to uphold the social standards it sets out; or, integrating social standards into the trade liberalisation agreements of the World Trade Organisation. A renewed commitment from developed countries to 37 raising development aid and allowing poorer countries to benefit more from trade liberalisation should lead to the emergence of a new political understanding between developed and developing countries. This should end the continuing perception amongst developing countries that social standards constitute a form of protectionism. Moreover, the goal of building a genuine bedrock of minimum working standards should be incorporated in all international and development policies, notably in the framework of IMF and World Bank policies. Only coherent action in this field can guarantee social progress for us all.

Furthermore, there has already been some reflection on how to turn the considerable economic weight of Multinational companies into a force for progress. As net beneficiaries of globalisation, multinationals have a duty that goes beyond profit maximisation. The concept of corporate social responsibility, elaborated over the past few years at European and global levels, deserves greater attention. While the concept should not replace the ongoing need for appropriate, binding regulation, tight and structured co-operation between public authorities, multinational companies, trade unions and non-governmental organisations is essential to exploiting the potential of corporate social responsibility to contribute to social progress and environmental protection. Furthermore, well-informed and aware consumers can strongly encourage more responsible corporate behaviour. Multinationals have the right to demand a political, regulatory and commercial framework that favours entrepreneurship and innovation. Society, on the other hand, has the right to expect socially and environmental responsible behaviour of companies that is independently verifiable. There are only gains to be made from such an approach.

Second Goal – Preserving the environment and sustainable ways of living

On the one hand, the fight against poverty and maintaining welfare in Europe cannot be conceived without stronger economic growth and the expansion of world markets. On the other hand, we know that our current modes of production and consumption are not sustainable in the long term because they are too destructive of the environment and demanding on natural resources. We cannot secure a high quality of human life over the next century on the basis of today’s predominant economic patterns. This is true of rich but also of poor countries and represents a major challenge for the whole of humanity.

The concept of sustainable development underlies this reality. New prosperity that is environmentally friendly and socially just must be created in Europe and in the world. Economics must now reconcile environmental, social and economic concerns in a new, balanced approach. This is not a new concept. What is, however, new is the central role it must now play in the political action of Nation States, Europe and international institutions. We must equally recognise the key role of environmental technologies in the future for the renewal and revitalisation of the European economy: We believe that this approach must be at the heart of our political vision. Europe has already tried to apply this concept through the Lisbon strategy. Nevertheless, the implementation of this visionary and practical agenda remains highly inadequate. Moreover, Right-wing parties in power are attempting to limit the strategy to its purely economic goals, which we are resisting.

Similarly, the international community has been trying to put sustainable development into practice since the Rio summit of 1992 and more recently the Johannesburg summit of 2002. Yet again, we are experiencing the same political lethargy, the same hesitations, the same reticence on the part of 38 certain governments and other actors, in the face of these profound and vital changes for our future. The failure to implement the Kyoto Protocol on reducing greenhouse gas emissions is in this respect the most scandalous and frustrating example.

Europe should continue to fight for a coherent and efficient global policy for sustainable development. It will have even greater force if it continues to commit itself firmly in this direction through its own internal policies. Responsible environmental regulation should play an essential role. But this is not enough. We need to stimulate research, development and innovation in clean technologies as much as possible. We are convinced that these technologies could rapidly prove to be a competitive advantage for the European economy. Their diffusion in other regions would stimulate sustainable development at global level, at the same time as bolstering the efficiency of modes of production. There should not be a contradiction between economic growth and respect for the environment. Quite the opposite.

Therefore, the European Union must equip itself with an ambitious programme for action in the field of sustainable development, from 2004 onwards, setting concrete ten-year objectives in targeted sectors, like transport, energy and agriculture. These sectorally-specific objectives would be reinforced by horizontal objectives, notably to favour a new corporate environment in which companies add social and environmental dimensions to their annual reports and sustainability criteria are built into market behaviour both from producer and consumer perspectives. The Lisbon strategy provides an appropriate political instrument for putting such a programme into practice.

Third Goal - Fostering peace throughout the world in the face of old and new threats

While the threat of a third world war dominated the international agenda until the fall of the Berlin Wall, new threats have emerged in recent years: international terrorism, the proliferation of chemical, biological and nuclear weapons, and international criminality. States are finding it hard to respond to these new threats with their outdated security instruments. Nevertheless, new efforts are being made, particularly since the events of September 11th 2001 in the USA, which will only be effective in the framework of genuine multilateral action, because unilateralism is not only wrong but ineffective.

Meanwhile, the world has made great progress in almost making war between states belong to history. The new challenge is war and violence within states, and the misuse of "failed states" as a base for forces threatening international security.

In this context of new threats, the invasion of Iraq has crystallised the problem of defining the intensity of these threats and the measures needed to respond to them. This dilemma has been strongly felt in the heart of our own political family. It shows how urgent it is for the European Union as much as the United Nations to give a precise definition to such threats, adopt a new security doctrine and equip itself with the means for intervention to face current challenges.

It will also never be sufficient to treat the symptoms of these problems without examining their causes. We should be asking ourselves about the deeper causes of current threats. We should not fall into the trap of turning globalisation into a scapegoat for the world's ills. But how can one help thinking that terrorism, criminality and regional conflicts, particularly in 39 Africa, may be the fruits of a divided world, incapable of building a common project based on solidarity, the fair distribution of wealth and cultural exchange?

In this spirit, our attitude to globalisation, expressed in this declaration, is grounded in a desire for a stable and peaceful world, which can only be built by going beyond traditional security policies incapable of solving problems at their root cause.

Europe has recently launched a debate on its own strategic positioning and a new doctrine. It envisages strengthening and modernising its defence capabilities, which is an essential objective to ensure regional security and to become a credible and important actor in the maintenance of world peace and security. Europe does currently not have the military capacity to respond rapidly and effectively to significant armed conflicts that may arise in its wider region, nor is its military force sufficiently adapted to new threats.

Emphasis should be laid on an enlarged security concept in military and police terms: conflict prevention must become a central preoccupation for European security policy and should mobilise adequate resources. Similarly, peace-building is a difficult but vital task for any effective security policy, as example of Iraq demonstrates. An effective common security policy would be composed of:

 The adoption of an effective European security and defence policy through the creation of an EU Minister for Foreign Affairs, the redefinition of the Petersburg Tasks, the idea of a solidarity clause amongst Member States in the event of attack, the creation of a European Armaments Agency and the possibility of reinforcing defence co-operation. Furthermore, Member states should commit themselves to consolidating and modernising their military capabilities at national level, within a co-ordinated and coherent European framework, to ensure a credible European military capacity, assuring regional security and enabling EU participation in international military operations in accordance with the principles of the Charter of the United Nations. This should also encompass a strong peace-building and reconstruction capacity, notably by taking stock of and building on the recent experiences in the Balkans.

 European political and diplomatic efforts to ensure the adherence of states signatories to international agreements on chemical, biological and nuclear weapons of mass destruction. Furthermore, there is a need for more comprehensive efforts to make non-proliferation a reality, including the involvement of non-state actors.

 The adoption of a programme of close international co-ordination, within the framework of the United Nations, to fight against new security threats, by vigorously tackling all the dimensions of this problem, in full respect of fundamental human rights: terrorist networks, criminal networks, centres and networks for money laundering; this programme would, above all, target the most vulnerable countries and regions by involving them actively in this fight;

 The reinforcement of the United Nations in the area of peace and security, through a reform of the Security Council by enlarging its membership and limiting the use of veto rights, by substantially increasing the military and logistical capabilities made available to the

40 United Nations, particularly by developed countries, for the prevention as much as for the resolution of conflicts and for peace- keeping. The United Nations' approach to humanitarian intervention should be equally reinforced by recognising the responsibility to protect civilian populations, using military means, in the event of patent and massive violations of Human Rights and in the events of genocide.

Fourth goal - Managing migration throughout the world, regulating labour migration, upholding the right to asylum, and achieving economic, social and cultural integration for immigrant populations in Europe

The presence of immigrant populations in Europe, representing just over 5% of our total population, has become a subject of concern for a great number of citizens. To this we must add the sometimes desperate and humanly tragic attempts of illegal immigrants risking their lives to enter Europe, in the often disappointed hope of finding a better future. This is sometimes the last stage in a long journey from regions characterised by poverty and conflict.

At the same time, the integration of these immigrants in Europe often proves difficult, in economic, social and cultural terms. In recent times, these real or perceived difficulties have given a new momentum to extremist and xenophobic parties in several European countries. This represents a very dangerous trend for European democracy. In their search for political solutions, some governments have hardened their stance on immigration, which has in turn marginalised immigrants further and made their integration more difficult. This only exacerbates the problem while temporarily giving the impression that a solution has been found. It also hides the fact that well-regulated international labour migration, and the mobility of the workforce it renders possible, is a great source of development and growth.

It is imperative for us to find a humane, but effective political response to this dilemma. The European Union and its Member States should propose a common programme for action, combining measures to regulate and control immigration with measures to integrate immigrants already resident in Europe. In addition, the right to asylum must be upheld while effectively preventing its abuse. Such a programme should comprise the following:

. Asserting a set of underlying universal values, such as Human Rights, gender equality or secularism. The integration of immigrants should be based on clearly defined rights and responsibilities.

. A common immigration policy based on the principle of non-discrimination. Europe and its Member States should have a clear idea of its capacity to absorb new immigrants in the future. The extent of future immigration should be the product of a democratic decision established transparently and complemented by suitable and effective integration policies. In other words, we have to rid ourselves of the false and dangerous idea that immigration is an uncontrollable phenomenon that is developing outside democratic political processes.

. Upholding the right to asylum, in full respect of the Geneva Convention. This right is not conditional on the capacity to absorb refugees; as long as the abuse of this right is prevented through efficient and rapid national assessment procedures and close co- 41 ordination between national public and administrations within the EU.

. A more co-ordinated and efficient fight against illegal immigration, human trafficking and black market employment. The Member States of the European Union should together commit themselves to fighting illegal employment, co-ordinating their efforts and exchanging their experiences by preventing this type of employment as much as punishing it, applying appropriate sanctions to offending companies. Countries on the borders of an enlarged Europe should be involved in this fight, because it cannot succeed without their active support for effective control of migration. In addition to this, a truly global policy to regulate and control migratory flows is needed. The UN's current mandate and resources are largely inadequate in this respect. An International Convention on Migration should establish the framework for political action and the resources needed for this. Such an undertaking would necessarily be part of a wider effort regarding policies, such as development policy and conflict prevention, which could reduce the causes of emigration.

. A truly effective economic, social, cultural and political integration policy for immigrants resident in Europe. This represents a considerable challenge. A collective effort is required in Europe to favour the creation of more effective policies in this respect. We have to increase the participation and involvement of immigrants in society, through educational, vocational training and language policies, and measures to fight unemployment and promote entrepreneurship. Public authorities hence need to adopt a positive and constructive approach. This should be based on the recognition of equal rights and responsibilities for all those who are legally resident within a country. The notion of responsibility, that of immigrants as well as that of the whole of society towards them should take pride of place in this approach in order to make the process of integration effective.

. A specific development policy for countries of emigration towards Europe, particularly sub-Saharan and Northern Africa and the Arab world. A true economic partnership should be established between Europe and countries in these regions, based on a common political agenda on relevant themes (migration, security, economic and social development, cultural understanding) in the framework of a more active and generous co-operation and development policy. Immigrants resident in Europe, and wanting to contribute to such a partnership through innovative exchange, remittances transfer facilitation (which represents one and a half times the level of official development aid) and even temporary return towards countries of origin, should be involved.

Fifth Goal - Promoting democracy at all levels, re-establishing a strong link between citizens and politics and reinforcing the capacity for political action to implement democratic choices, particularly at global governance level

Today’s globalisation has taken us into a new political phase of more complex and opaque decision-making processes, quite apart from its practical economic, social and cultural impacts. In limiting the role of the public sphere and partially transferring decision-making and political action from the national to the regional and global levels, globalisation

42 has created a situation in which the very idea of democracy is increasingly under threat.

Democracy has to be reshaped for a new era. Democracy can never be taken for granted, but must be re-won over and over again, putting "us, the people" in charge of the future.

It is crucial to re-establish the role of politics and democratic choice in this new context. On the one hand, national and European political parties must face globalisation as a phenomenon that is now central to all our lives and demands strong political solutions. This is notably what this declaration aims to do.

On the other hand, citizens should be able to choose, monitor and evaluate the actions of their elected representatives regarding globalisation. This obliges national governments and parliaments to articulate their political actions in new ways; what this means is that globalisation or European integration are no longer a foreign policy subject. At European level, the Council of Ministers, the European Commission and the European Parliament must improve how they communicate their decisions. If this does not happen it will be impossible for citizens to understand the ins and outs of national and European policies with regard to globalisation. We believe that a new type of global democracy, completing a national and regional (European) democratic structure, itself consolidated through the reconnection of citizens with politics, will eventually be necessary. In the longer run, this could take the shape of a United Nations Parliamentary Assembly. In the meantime, global democracy should also be strengthened through actively engaged democratic political parties and greater participation of global civil society.

Democracy and political action are not, however, only a question of legitimacy, but also of efficiency. In this respect, a look at the past few years is alarming. The actual ability of international institutions, or rather global governance, to tackle the problems of globalisation efficiently is highly inadequate. A radical reformism in the face of global governance is therefore necessary, the first goal of which being the considerable strengthening of the United Nations multilateral system, in the fields of peace and security as much as in social, environmental and economic governance.

The UN has at its disposal a very rich political agenda, which has been developed over the last few years - the UN Millennium Development Goals, and the Doha, Monterrey and Johannesburg agendas, agreed by the international community. We now must give the UN the political, institutional and financial capacity to actually implement these agendas.

Global governance must be reinforced urgently in order to ensure the coherence of the different international organisations and agencies, primarily the IMF, the World Bank, the WTO, and the ILO.

Other reforms are necessary. These include the following: consolidating the ILO’s role by empowering it to issue binding regulations on labour standards; reforming the IMF and World Bank by increasing the weight of developing countries in these institutions, making their policies more effective in development terms and taking greater account of social and environmental concerns; reforming the World Trade Organisation by reinforcing its ability to conclude ever more complex negotiations and, more specifically, to take greater consideration of the positions of developing countries in the negotiation process.

43 The EU should play an active role in these reform processes. This will, ultimately, call for a move towards single EU seats in the different international organisations.

In the area of peace-keeping and security, the Security Council of the United Nations must be enlarged to make it more representative of the various regions of the world. It should formulate a clear concept of new threats to collective security and should make the necessary resources available to implement an effective security policy as well as an early warning mechanism to enable conflict prevention and lasting peace.

In the economic, social and environmental field, a United Nations Council for Sustainable and Human Development (Development Council) should be created. This new Council would have the same political status as the current Security Council and would co-ordinate all global policies in these areas. In addition to current international organisations like the ILO in the social field, it would be supported by a new World Environment Organisation that is currently lacking in the multilateral system. The so- called Bretton Woods institutions, the International Monetary Fund and the World Bank, would join the United Nations system to ensure a greater coherence between the activities of all international institutions.

We will find it difficult to have such proposals for reform accepted. The most important of these will require amendment of the United Nations Charter, which will require a majority of two thirds of the UN’s Member States and the support of the permanent members of the Security Council.

For this reason, such reforms can only be envisaged as the end result of a long and difficult political process. We thus propose the launching of an International Convention for the reform of the United Nations in 2005, in order to structure and give a democratic character to such a process. This Convention would comprise government representatives and parlamentarians of the UN’s Member States, while remaining open to active dialogue with global civil society. Its discussions could be based on the work of regional Conventions for guidance and simplification. At the end of its work, the Convention would submit a reform package to the United Nations General Assembly.

V. Conclusion

The European elections of 2004 and the resultant political agenda for the European Union should provide strong support for our response to the challenges of globalisation, at global as much as at European level. The 2004-2009 period, which corresponds to the mandate of the new European Commission and European Parliament, will largely determine the future of Europe and the world because it will be a crucial period for:

. The adoption and implementation of the new European constitution; . The success of the Union’s enlargement to 10 new countries and several more in a second phase; . The realisation of the so-called Lisbon objectives by its 2010 deadline; . The realisation of the Millennium Development Goals in poorer countries; . The reform of the United Nations multilateral system.

If successful, all of these factors will contribute to a better management of globalisation. The Party of European Socialists and its member parties propose a strong and ambitious political vision in all of these fields. It is for this very reason that we need to be given the political 44 weight to turn this vision into reality at European level. At the same time, we are aware that Europe cannot build stronger and fairer global governance alone. Concrete examples such as that of the campaign for an International Criminal Court show that political progress depends on the creation of wide coalitions, uniting progressive governments, non- governmental organisations and other actors. A strong and committed global civil society movement is developing, whose influence and capacity for action is increasing.

In this context, the PES, in collaboration with its Parliamentary Group in the European Parliament and the Socialist International, has launched a new initiative: the Global Progressive Forum. This Forum aims to be a centre for debate and action for all progressive forces towards the goals contained in this declaration. The Forum’s objective is to contribute to the emergence of global progressive alliances, sufficiently strong and influential to transform globalisation during this new century into a phenomenon that serves the public interest and provides the means to build a sustainable world in which each human being can enjoy a high quality of life and human dignity.

What may appear utopian today should become a part of our established rights in decades to come. Humanity has the means to achieve this vision. It is up to us to make it a reality.

45 This declaration was elaborated by the PES high level group on globalisation. It has at this stage, already been signed by the members of this group (*) and by the following other political personalities:

Poul Nyrup Rasmussen MP (*) PES Rapporteur on globalisation and chair of the high level group, chairman of the Global Progressive Forum, former Prime Minister, Denmark

Jean Asselborn MP President of the Socialist Party (POSL), Luxembourg

Enrique Barón Crespo, MEP (*) President of the PES Group in the European Parliament, Spain

Pervenche Berès, MEP Leader of the French Socialist delegation and Vice-chair of the PES Group in the European Parliament, France

Max van den Berg, MEP (*) Vice President of the PES Group in the European Parliament, Vice-chair of the EP development and co-operation committee, The Netherlands

Josep Borrell MP Chairman of the EU committee in the Spanish Parliament, former minister, Spain

Udo Bullmann MEP Deputy leader of the German SPD delegation in the European Parliament, Germany

Philippe Busquin European commissioner for research, former president of the Parti Socialiste, Belgium

Stephen Byers MP Member of UK House of Commons, former cabinet minister, UK

Ingvar Carlsson Former co-chair of the Commission on Global Governance, former prime minister, Sweden

Jacques Delors President of Fondation Notre Europe, former president of the European Commission, former minister of finance, France

Kemal Dervis MP Former minister for economic affairs, former vice-president of the World Bank, Social Democrat Republican Peoples Party, Turkey

Harlem Désir MEP In charge of European affairs, Parti Socialiste, France

Anna Diamantopoulou MP Former European Commissioner for employment and social affairs, Greece

Elio di Rupo MP (*), President of the Parti Socialiste, former Vice Prime Minister, Belgium

Laurent Fabius MP National Secretary of the Parti Socialiste, former Prime Minister, France

Piero Fassino MP (*) National Secretary of Democratici di Sinistra, Italy

Eduardo Ferro Rodrigues MP Secretary General, Socialist Party, Portugal

46 Robert Goebbels MEP Vice-president of the PES Group, former minister for economic affairs, Luxembourg

Felipe González MP Former Prime Minister of Spain

Elisabeth Guigou MP Vice-president of the National Assembly delegation for the European Union, former minister for employment and solidarity, France

Alfred Gusenbauer MP President of the Socialist Party (SPÖ), Austria

António Guterres (*) President of Socialist International, former Prime Minister of Portugal

François Hollande MP President of the Socialist Party, France

Toomas Hendrik Ilves MP EP Observer, former minister for foreign affairs, Estonia

Tadeusz Iwinski MP Secretary of state in the chancellery of the prime minister, vice-president of the Parliamentary Assembly of the Council of Europe, Poland

Carin Jämtin Minister for development, Sweden

Giorgos Katiforis MEP, PES Group vice-president, Greece

Glenys Kinnock MEP, Co-chair of the EU-ACP parliamentary assembly, UK

Niel Kinnock, Vice President of the European Commission, UK

Pascal Lamy (*), European Commissioner for Trade, France

Erkki Liikanen, European Commissioner for Enterprise and the Information Society, Finland

Pasqual Maragall, President of the Autonomous Community of Catalonia, former mayor of Barcelona, Spain

Claudio Martini, President of the Tuscany Region, Italy, Vice-President of the Socialist Group, Committee of the Regions

Denis McShane MP (*), Minister for Europe, UK

Pierre Moscovici (*), National Secretary for international affaris, Parti Socialiste, former Minister for European affairs, France

Poul Nielson, European Commissioner for development and humanitarian aid, Denmark

Pär Nuder (*), Minister for policy co-ordination, Sweden

Raimon Obiols (*), MEP, Vice-President of the European Parliament, Vice-chair of the Global Progressive Forum, Spain

Göran Persson, Chairman of the Social Democrat Party, Prime Minister, Sweden

Ruairi Quinn MP, Vice-President of the PES, former Finance Minister, Ireland

47 Michel Rocard MEP, Chairman of the EP committee on youth, education, the media and sport, former Prime Minister, France

Maria Joao Rodrigues (*), Vice chair of the Socialist International committee on the economy, social cohesion and the environment, Vice-Chair of the Global Progressive Forum, Portugal

Pierre Schori, Ambassador to the United Nations, former secretary of state for foreign affairs, Sweden

Martin Schulz MEP, PES Group vice-president, leader of the German SPD delegation in the European Parliament, Germany

Costas Simitis MP, Former Prime Minister, Greece

Angelica Schwall-Düren MP Deputy chair of the SPD Parliamentary Group in the Federal Parliament, in charge of European affairs, Germany

Vladimir Spidla President of the Czech Social Democrat Party, Prime Minister, Czech Republic

Dominique Strauss-Kahn MP, Former Minister of finance, the economy, trade and industry, France

Hannes Swoboda MEP PES Group vice-president, leader of the Austrian social-democrat delegation in the European Parliament, Austria

Tibor Szanyi, MP Secretary of State for agriculture and rural development, Hungary

Akis Tzohatzopoulos, Former Minister for development, Greece

Walter Veltroni MEP, Mayor of Rome, former deputy prime minister, Italy

Günter Verheugen European Commissioner for enlargement, Germany

António Vitorino, European Commissioner for justice and home affairs, Portugal

Margot Wallström, European Commissioner for the environment, Sweden

José Luis Rodríguez Zapatero MP, Secretary general, PSOE, President of Government, Spain

Christoph Zöpel MP (*), Chair of the Socialist International committee on the economy, social cohesion and the environment, former Secretary of State for foreign affairs, Germany

48 Promoting investment and policy change for sustainable growth and participation in Europe

tabled by PES Rapporteur, Poul Nyrup Rasmussen

Brussels, December 2003

49 50 Our point of departure: to harness globalisation and to provide security in change

The Lisbon strategy is the European Union’s most comprehensive way of tackling Europe’s economic, demographic, employment and environmental challenges in order to achieve sustainable development. The long-term objectives of high growth without environmental degradation and full employment within socially cohesive societies must not be lost.

But there is no room for complacency. Economic realities underline the need for further reforms and implementation of decisions taken should be a leitmotif when preparing the next Spring Summit 2004. But it is not by belittling progress made that momentum for a more resolute national implementation is achieved.

After a period of uncertainty, some positive signs are emerging in Europe. An improvement in the international economic environment, low levels of inflation and better conditions in the financial markets are key factors behind an upturn in economic activity, which is expected to strengthen in the course of 2004. However, there is still the risk of a downturn in the EU economy. First, the global recovery may be less vigorous than expected, which might put at risk the expected upturn in the EU economy. Second, any excessive appreciation of the euro would dampen growth prospects for the euro area. Third, a longer period of adjustment by firms to increase productivity and profitability would hold back investment and consequently dampen the growth prospects of the euro area and the EU as a whole.

Since the situation remains fragile, a message of confidence for the European Union's economic and human potentials is needed. The current economic and social situation is undermining the confidence of European businesses and of our citizens. However, without this confidence, the challenging project of a growing European Union is put at risk.

In this context, it is essential to recall our point of departure. Our main purpose was to use the year 2000 to launch a long term ambition: a new European strategy, the so-called "Lisbon strategy", capable of giving a positive response to

 the opportunities and risks deriving from globalisation  the necessity to manage technological change and provide new security  the challenge of moving the European economy towards a knowledge-based economy  environmental needs  restoring full employment and better jobs  ensuring social rights and inclusion.

This strategy is the only available policy route if the European Union is to succeed in facing the challenges ahead. However, the EU has not yet succeeded in convincing all political levels concerned, nor the wider public, that the Lisbon strategy is a strong policy instrument for using our growth and employment potentials and addressing the economic, social and environmental challenges we are facing in order to reach our commitment for sustainable growth and full employment.

Since the launch of the Lisbon strategy there has been sometimes slow but steady progress on the structural reform part of the agenda. In other areas, where the main responsibility lies with Member States progress has been more uneven. There is reason to call on the Lisbon 51 strategy to be more focused in future on issues like full employment, investment, welfare reforms, environmental and social protection issues, research, education and life long learning.

Investment in human resources, research and new technology are points of intersection for key aspects of the Lisbon strategy. Without such investment the EU will achieve neither full employment and the higher productivity needed to meet demographic challenges nor the reduced pollution and enhanced energy efficiency needed to meet environmental challenges. A high and sustainable level of private investment presupposes favorable business conditions, including low capital costs and high expectations of profitability. It also necessitates a well-balanced macroeconomic policy mix that brings the European economy close to full capacity utilisation. This, together with continued structural reforms, will provide the incentives necessary to attain a boost in business investment. Sound public finances are prerequisites for sustainable growth. Within such a framework, redirecting public expenditure towards growth-enhancing investment can significantly contribute to the Lisbon objectives.

Particular attention should be given to new Member States. All applicant countries have demonstrated considerable economic growth in recent years, but there is still much catching up left to do. The institutional settings and the economic, environmental and social dynamics of implementing the Lisbon and Göteborg strategy in the new Member States differ a lot from the situation in the present European Union. In many ways, there is the legitimate need to develop a specific, offensive policy to enable the new Member States to cope with the Lisbon strategy demands: a differentiated approach is needed, at least in the beginning of the “enlarged” period. In this respect, it is more important that economic reform go hand in hand with measures to promote sustainable development, employment and social inclusion.

On the eve of an enlarged European Union, we have to build upon the strength of a United Europe: stimulating strong economic activity in a sustainable way and opening up European-wide potentials for an inclusive society are necessary components to take the European economic, environmental and social model successfully into this new century. Recovering sound macroeconomic policies, accelerating structural reforms and promoting investment in infrastructure and human capital are key priorities. In this context, modern European economic, environmental and social policies should continue to be aimed at producing job-creating growth, equal opportunities and social security in a general context of sustainable development.

The problems which we are facing: incoherent implementation and lack of communication

Nevertheless, the fourth year of the Lisbon strategy is marked by the weak performance of the European economy, with growth at a ten-year low and rising unemployment. This is seen by some as a token that the Lisbon strategy is failing. That is not a correct conclusion. While progress has been made in only some areas, an ambivalent picture of the state of play is to be drawn:

 Economic and employment conditions today could hardly be more different: Political uncertainty and the downturn over the past three years have knocked business and consumer confidence. The 52 vulnerability of our economy and labour markets reinforces the case for accelerating the pace of change.  The debate on the implementation of the "EU Stability and Growth Pact" is dominating the political agenda: The process of budgetary consolidation has come to a halt since 1999 in a number of countries and, in some cases, has even reversed. Macroeconomic policy has been insufficiently growth and employment-oriented, especially due to continuously low public investment. Parties opposed to the Lisbon strategy are putting the strategy into question, in particular in view of the present situation of public budgets.  The Lisbon strategy has been a central reference in the development of EU economic, environment, employment and social policies: The European Commission gave this strategy a certain priority in its work programme and has presented proposals in line with the political agenda and guidelines defined in Lisbon and after. However, the heterogeneous quality of proposals and implemented measures has led to a predominantly market-oriented implementation, favouring progress in economic reforms and liberalisation at the expense of the environmental and social dimensions.  EU instruments have been developed and the "open method of co- ordination" is being extended to the information society, research, innovation, education and social exclusion policies. Furthermore the majority of the policy objectives and instruments are introduced in the proposal for the future European constitution, proposed by the EU-Convention in July 2003. Nonetheless, the instruments need more backing at all political levels. An overarching debate on possible policy fields could help to foster the whole exercise.  It has been difficult to develop an effective policy co-ordination mechanism of multi-level governance: In spite of the European Council, the challenge to move from a single policy approach towards a cross-sectoral approach (policy-mix strategy) and to involve the European, national, regional and local levels at the same time remains largely out of reach. In addition, the different Councils concerned were in general not able to fulfil the political agenda and to adopt the respective legislative initiatives in time.  The implementation of the Lisbon strategy is lacking mostly behind at national and local level: Only parts of the political agenda and guidelines defined at EU level have been implemented by Member States at national level, although the connection with the EU level is not often made explicit and very often concerns only a few policy areas.  The new Member States have been exposed to the requirements of the Lisbon strategy as late as the very end of the accession process. The implementation of the Lisbon strategy can play an important role of leverage for catching up but will be much more difficult and potentially protracted there. Thus special attention should be paid to the corresponding institutional and fiscal capacity building both at EU and national level.  It has been difficult to communicate the primary objectives and expected benefits to the national and local authorities, businesses, media and citizens at large: The Lisbon strategy has not been successfully translated either into domestic strategies or into strategies for enterprises, for the media and for citizens. An effective European information campaign has so far been lacking.

53 Our primary objective: To develop the European economic, environmental and social model towards full employment and an active welfare state

The Lisbon strategy launched in 2000, and since then completed by an environmental policy dimension at the Göteborg EU Summit in 2001, should be understood as a strategy for the development of the European economic, environmental and social model requiring an effective European economic, social and environmental governance, committed to shared values of solidarity and sustainable development. This implies an active environmental policy, the preservation of social security and a permanent quality investment strategy for research and education. These policies are complementary and mutually supportive factors for economic and social governance. They are not in contradiction with ensuring that the European Union should "become the most competitive and dynamic knowledge-based economy in the world", but they are in positive synergy with achieving this strategic objective.

The Lisbon strategy brings together a large number of policy fields: information technology, research and innovation, enterprise, single market, environment, education and training, employment, social protection, social inclusion and economic policies. In all of these areas, it brings with it significant reforms aiming to deliver stronger sustainable growth, full employment, greater social solidarity and, ultimately, a better quality of life for all European citizens. Consequently, the cornerstone of the consensus to be maintained within this strategy is the balanced policy-mix between its economic, environmental and social dimensions and their mutually reinforcing reform processes.

Overall, the primary objectives of increasing Europe's investment and skill potentials, as well as the development of effective economic, social and environmental governance to reach these objectives, are the main challenges. The overriding need to continue our fight against unemployment, against insufficient levels of investment and in favour of greater social inclusion and better quality of life must henceforth be maintained at the heart of all discussions on the future of our European economic, environmental and social model in an enlarged European Union. This implies that the Lisbon strategy must not be turned into a pure "business" or "market strategy". To achieve this, we have to re-define economic growth within a more environment-friendly model of sustainable development conducive to the improvement of working and living conditions through high levels of individual education and training in a dynamic knowledge-based European economy. We must ensure that the policies and reforms the Lisbon strategy generates provide tangible answers to ordinary peoples' concerns in their daily lives.

At this stage, we do not see the need for new targets or new procedures. Rather, those agreed at the successive summits since 2000 need to be implemented in a more courageous and efficient way and with equal determination by our national governments and parliaments. Furthermore, from now on, this must also integrate the enlargement implications for the Union, with a particular focus on new job creation and new skills.

Against this background, we should pursue the following priorities with a view to the next follow-up of the Lisbon strategy:

A. Focus on an "active welfare state" and a higher growth potential, maintaining a high standard of welfare protection, contributing to the necessary modernisation of social 54 protection systems, fighting against poverty, discrimination and social exclusion, meeting the demographic challenges as well as re-directing public budgets towards more investment in human resources, notably investment in research, environmentally friendly technology, education, life long learning and social services.

B. Focus on quality public finances conducive to sustainable growth and social cohesion, linking fiscal consolidation and the medium- term objectives of the Stability and Growth Pact to the Lisbon strategy, re-focusing on tax policies, notably the shift of the tax burden from labour to capital and the use of tax incentives (notably on energy) for a sustainable, environment friendly development, co-ordinating corporate tax and tax incentives for innovation and investment in human resources, as well as reorienting the EU budget towards more European- wide investment activities in line with the Lisbon goals.

C. Focus on national implementation and policy co-ordination, achieving an efficient European economic, social and environmental governance and translating the Lisbon strategy into an agenda for European citizens.

A: Focus on an "active welfare state" and a higher growth potential

 Develop a skills strategy, especially by identifying skill needs and by developing life long learning systems for everybody  Develop a European investment strategy for material, non-material and social infrastructures  Improve the internal market, in particular the service market and better conditions for businesses  Produce high quality research  Support environmentally friendly technology and production  Promote high-productivity employment as well as health and safety at work  Meet demographic challenges, reinforce social security reforms and promote equal opportunities and care systems  Fight against poverty and social exclusion with a broad range of measures which enable re-integration and the strengthening of people's capacities.

We believe that Europe must direct its policies towards an "active welfare state", whereby education and an upgrading of qualifications ensure the maintenance and creation of high-productivity jobs, capable of guaranteeing decent wages, good working conditions and strong social rights. We want economic and social reforms which lead neither to passive dependence on benefits nor to new modes of discrimination and exclusion. Instead, real reforms in the sense of the Lisbon Strategy are tools for enhancing labour supply and motivating people to find and take up jobs and participate in society. We want to create more favourable conditions for public and private investment. Last but not least, we want to fight against poverty and social exclusion by increasing the labour market participation among women, young people, immigrants, the disabled and older people.

We also want to create more favourable conditions for businesses to provide growth potential and high quality jobs, which focus on innovation, quality, including health and safety at work, life long learning and modern social security. The private corporate sector has to play an active role in this context. In addition, in the framework of a European corporate social responsibility strategy, closer co-operation between the private 55 corporate and public sectors is highly important for stimulating social cohesion. Public authorities, the business community and the trade unions can provide and support opportunities for the less privileged to retain their jobs or to re-join the workforce, such as by providing joint public/private supplementary training/in-service training.

The continuous improvement of the internal market is of fundamental importance for a competitive European industry, but also in ensuring consumer benefits. External trade policy should be fully exploited as an important additional instrument to facilitate structural change. An ambitious outcome of the WTO-negotiations that improves market access for goods and services and reduces trade-distorting subsidies is therefore vital. Market distortions must be combated and the Commission’s instruments in this area need to be vigorously applied. Better and appropriate regulation is another important aspect in increasing European competitiveness. The service sector constitutes around 70 percent of the Union’s GDP and improvement in the functioning of the internal market in this area is one of the major remaining challenges. The European Commission’s internal market strategy 2003-2006 in this respect needs to be forcefully implemented.

Moreover, synergies have to be developed between structural reforms for business, competition, research, education and social policies in order to fulfil new needs relating to health, the environment, social inclusion and care. However, necessary structural reforms are only politically and socially acceptable if they are embedded in a system which guarantees the rights and expectations with opportunities not only for the well educated but for all wage earners and citizens who may be affected by structural reforms. This implies that for those who are affected in the short term, the reform process must from the very start include an economic and social perspective and concrete sets of actions which should lead to new job opportunities.

A modern economic policy includes environmental considerations. Sustainable growth is not compatible with environmental degradation. Environmental policies need not hamper economic progress. On the contrary, they can increase demand by opening up new business opportunities and thereby contribute to growth and job creation. To achieve this a mix of market based tools and EU and national legislation will be needed. A form of economic growth is needed which is based on a responsible and efficient use of natural resources, on respect for the environment, on modes of production that comply with the imperative requirements of public health and consumer safety and protection, and the preservation of biodiversity, fauna and flora. With this in view we need to promote the development of corporate environmental responsibility together with clear EU rules in the field of environmental liability and substantial progress on energy efficiency. It should be recognised that environmentally friendly policies and investments are not a burden on economic development, rather they can have a positive and dynamic impact on growth, employment and social well being. Higher investment should lead to the introduction of new and cleaner technology and thereby promote higher productivity as well as corporate responsibility in the environmental field. Frontier technologies such as IT and biotechnology lay the foundation for new business, jobs and growth. However, to a large extent the technologies and systems of the past still dominate in areas such as transport, energy, parts of manufacturing industry and agriculture. To speed up the replacement of old technologies there is a need for investment through new market-based incentives and public procurement. It is therefore necessary that the European labour, product and service markets function better together and all must respect 56 sustainable development as a matter of solidarity between generations and with the poorest populations of our planet.

In order to attract resources the research community has to be a driving force by producing high quality research. There is a need to reinforce excellence at universities, research institutions and private R&D companies. Competition will strengthen existing centres of excellence and stimulate the creation of new strong research groups. This approach would also enhance the possibilities for commercialisation of new innovative techniques within IT, biotech and other frontier technologies.

Good working conditions enhance the health of workers and promote higher productivity. Likewise, new problems at work such as stress, psychosocial strain and illness at work hamper prosperity and growth. Better jobs thus contribute to employment and growth, and improved health and safety regulations are needed within the European Union.

Low employment rates, in particular amongst older workers and immigrant populations within the EU, are a waste of human resources. This also generates social exclusion and instability. We therefore must increase the labour market participation of women, immigrants, the disabled and older people by measures to integrate them, facilitating the reconciliation of work and family life, and incentives to promote longer working life. Consequently, special importance must be given to pension reforms and a stronger interaction between pension system reforms, immigration policy, active labour market policy and policies to combat social exclusion. EU migration policy includes several aspects that should become part of the Lisbon strategy. This is also about saving the European economic, environmental and social model. To step up the fight against social dumping and social exclusion we also need to promote the adoption of an adequate minimum income and minimum pension, as well as a minimum wage implemented through either legislation or collective agreements between social partners.

Consequently, our aim is to oppose a purely economic strategy of "working poor" through which European competitive capacity would rest upon downward pressure on wages and social standards, bad working conditions and unequal access to education and training. This should also include the necessity to combat more effectively undeclared work. Full employment is the overriding Lisbon objective for the improvement of the European economic and social model. We therefore need to stimulate high- productivity employment through investment in research, education, skills and lifelong learning. This, in turn, should enhance broader access to a high quality learning content as well as to higher occupational and geographical mobility and a higher rate of participation in the labour force for women and older people. More generally, such a reinforced active labour market policy should make tax and benefits systems more conducive to a high level of labour market participation. Tax incentives should be introduced for enterprises which invest in innovation and life long learning. Gender equality must be more widely promoted and other forms of discrimination at work and in access to work must be actively avoided throughout universal care systems. Of particular importance in this context is progress towards the common target for child-care set at the EU Council in Barcelona. Promoting all aspects of the quality of work is crucial in this context. Good working conditions enhance the well-being of workers and promote higher productivity and a sustainable working life.

57 Concrete measures to strengthen the Lisbon strategy 2004

 to develop a European Investment Strategy not only for material infrastructures but as well for non-material and social infrastructures, including public-private partnerships

 to firmly implement the European internal market strategy 2003-2006, with the main objectives of harmonisation of national regulations and in particular an internal market for services

 to urge for a thorough implementation of the action plan on entrepreneurship in order to create a better business climate in Europe

 to set up an action plan for the introduction of new and clean environmental technologies, including the promotion of marketing and exporting of clean technologies

 to make substantial progress on energy efficiency by decupling energy consumption and growth and by increasing it in the long term by at least 1% on average, and further developing the use of renewable energy as well as by starting a review of the existing action plan for energy efficiency

 to include the environmental dimension in the streamlined policy co-ordination cycle on economic and social policy by introducing guidelines in this field too

 to enhance the European knowledge area by opening national systems of research and by promoting co-operation through knowledge centres in different sectors

 to improve the European and national policies for innovation and to foster networking and partnerships between enterprises, public and private research and education activities by financing co-operation and best practices within the framework of the European Structural Funds

 to develop common quality standards for education and recognition of professional qualifications and to identify European skills needs

 to develop and identify best practice in sharing costs and to implement lifelong learning activities for everybody

 to assess the contribution to sustainable growth, innovation and employment within the framework of the EU competition policy, namely EU merger control and takeover bids

 to identify best practice in matching pension and education systems with population ageing and immigration needs

 to promote the adoption of an adequate minimum income and minimum pension as well as a minimum wage implemented through either legislation or collective agreements between social partners

58  to ensure the maintenance and creation of high-productivity jobs, capable of guaranteeing decent wages, good working conditions and strong social rights and to call urgently for the presentation of a communication on the directive concerning certain aspects of organization of working time

 to improve health and safety at work and working conditions in general and to guarantee an adequate level of protection for atypical workers

 to reduce poverty across the EU by 50% by 2010 and foster the implementation of measures to improve social inclusion, qualification and labour market integration.

 to intensify progress towards the common target for child-care set at the EU Council in Barcelona by identifying best practice

 to make real progress in developing the social service society with a view to equal opportunities and the necessary improvement in combining work and family life by promoting care services within the framework of the European Structural Funds.

B. Focus on quality public finances conducive to sustainable growth and full employment

 Link the Stability and Growth Pact with the Lisbon strategy by introducing the “golden rule” for investment activities and budget allocation rules for times of high economic growth  Enhance the quality of public finances and restructure public budgets towards higher levels of investment  Invest 3% of GDP in research and 2% of GDP in higher education  Reduce the fiscal burden on labour, improve co-ordination on company tax and develop tax incentives  Strengthen and redefine the EU budget  Assess the possible contribution of “euro bonds”

We regard sound public finances and controlled levels of public debt as providing a platform for fiscal stability. However, stability is not an end in itself. On the contrary, stability should be seen as providing new opportunities to public policy-makers in contributing most effectively to the ultimate objectives of strong and sustained growth, social justice and full employment. We therefore support the necessary adjustments for a more intelligent application of the Stability and Growth Pact in line with the Lisbon objectives and the introduction of the “golden rule” taking into account investment, structural reforms and deficits, active labour market policies, and financial burdens arising from the ageing of the population when assessing yearly the stability and convergence programmes. Restructuring public finances towards investment is important in this context. Furthermore it will be important to set budget allocation rules for times of high economic growth and to re-define public deficit targets by taking account of non-cyclical expenditure paths and to define improved public spending, namely by making a distinction between investment expenditure, current expenditure and revenues.

The weakest conceptual flaw of the European Initiative for Growth is the lack of human resources development. How should a knowledge society be brought about if we do not invest sufficiently in research, education, 59 training, studies and lifelong learning facilities for Europe's most precious capital: its people? Compared to the US, Europe had a gap of 13% in its share of population having completed higher education in 2000. The European Union Member states' budgets allocate only 1.1 % to higher education, while in the US it is 2.3%, including private sector. These figures clearly illustrate that the present situation is inadequate for a knowledge-based and innovative economy and indicates the need to increase investment in research and education, in particular in lifelong learning.

Additional research and education spending will boost annual growth and job creation. The objective of investing 3% of GDP in research and 2% in higher education in Europe by 2010 should be actively pursued. This requires in particular an average 6% nominal increase in public spending on research and education as well as more leverage from public to private funding. More investment in research and education will also stimulate high-productivity employment and training. Technologies such as biotechnology, ICT, and environmental technologies lay the foundation for new business, jobs and growth. More investment and market-based incentives are also needed to speed up the updating of technologies in many industrial and manufacturing sectors.

This also entails improved co-ordination of Member States' tax policies with a view to avoiding harmful tax competition and to increasing transparency on capital incomes and movements. Enhanced tax policy co-ordination is needed to stop internal fiscal competition among Member States. It should be employment-and environmental-friendly, reduce the fiscal burden on labour, create a more co-ordinated SME-friendly tax system and use tax incentives to stimulate private investment into human resources and public- private-partnerships while at the same time ensuring sustainable financing for social protection.

The EU-institutions have repeatedly appealed to the Member States to redirect public expenditure towards growth-enhancing investment in physical and human capital and knowledge, high-technology industries, environmentally friendly production, infrastructures and Trans- European network industries. The European Commission's "Agenda for a Growing Europe" has made similar proposals for the EU budget to redirect its financial resources and focus on growth-enhancing activities, but we have to go much further. We suggest that the EU budget should have a role as a catalyst in promoting growth. It is therefore necessary to fundamentally restructure the EU budget so that it is more clearly focused on growth and employment factors and improve its delivery mechanisms. A better leverage with private investment and the ability to influence national budgets are pre-conditions for Europe´s needed higher productivity. We would therefore also stress the need to redefine the various categories of the EU budget and to use the Structural funds to accord greater priority to the implementation of the Lisbon strategy. Furthermore we have to assess Jacques Delors' idea of European bonds to finance projects identified as of common interest in the framework of a European- wide investment strategy.

Concrete measures to strengthen the Lisbon strategy 2004

 to set budget allocation rules for times of high economic growth and to redefine public deficit targets by taking account of non-cyclical expenditure paths and to define improved public spending, namely by making a distinction between investment expenditure, current expenditure and revenues 60  to apply the “golden rule” in the Community budgetary surveillance mechanisms, i.e. the distinction between current and capital spending in line with the Lisbon objectives when assessing the budgetary situation in the Member States

 to develop procedures to evaluate the quality of public finances in their contribution to common European public goods and in line with the Lisbon objectives (i.e. infrastructure, research, employment, education and training, social services) and to the reduction of structural unemployment, to be based on a common definition of "high quality public expenditure"

 to redirect public expenditure towards physical and human capital accumulation in such areas as employment, education and training, lifelong learning, research, information and sustainable frontier technologies, as well as towards social services and environment- friendly growth

 to invest 3% of GDP in research and 2% on higher education in Europe by 2010

 to create a more co-ordinated, efficient SME-friendly tax system, in particular on tax on capital income and use tax incentives to stimulate private investment in human resources, sustainable development (notably renewable energy) and public-private-partnerships as well as to increase transparency and publicity on capital incomes and movements

 to reduce taxes and contributions on low income and shift burdens from low wages and low incomes to higher earnings and capital

 to fundamentally restructure and redefine the EU budget, making it more clearly focused on growth factors

 to assess the idea of European bonds to finance projects identified as of common interest in the framework of a European-wide investment strategy.

C: Focus on national implementation and policy co-ordination at all levels

 Improve policy co-ordination of different actors and sectors  Synchronise policy instruments at and between EU and national levels  Focus on implementation at national level  Develop a specific, offensive policy to enable the new Member States to cope with the Lisbon strategy demands  Develop efficient economic, social and environmental governance by reforming public administration  Strengthen democratic control of the European Parliament and national parliaments  Reinforce public information and participation

The actual implementation of the enlarged Lisbon strategy will require a political engine, i.e. economic, social and environmental governance at European level with the necessary mandate and means to co-ordinate policies and to 61 adapt them to each national context. Governance means the specific ways of deciding and implementing policies through informal rules and formal institutions (such as co-decision procedure between European Council and Parliament) and a set of agreed objectives. While not all European objectives need to be decided or implemented by a centralised authority (like the open method of co-ordination), it is clear that not all forms of intergovernmental policy co-ordination will have the same effectiveness. There is a role for both democratically controlled inter- governmentalism and Community methods. However, we need to establish criteria to determine which policy regimes are likely to produce the best results for the Lisbon goals.

An efficient policy mix will keep aggregate supply and demand in balance. But it will also have an effect on the growth potential of the EU economy. The transmission mechanism from stabilisation policy to long-term economic growth works essentially through investment in the stock of physical and human capital. Higher growth therefore requires a macroeconomic policy mix that creates an incentive for investment, but this effect would be significantly amplified if national structural reform policies created positive externalities in the form of higher productivity. In this context, the Broad Economic Policy Guidelines should internalise these reciprocal externalities between macroeconomic management and structural reforms by formulating a coherent document that gives orientation to national policy-makers. But only the Lisbon strategy sets out the overall design for achieving growth and welfare improvements with the open method of co-ordination as an instrument to be added to the legislative instruments, in order to foster convergence towards some common political priorities.

However, in each of our Member States, institutional innovation has still to internalise the level of integration accomplished through economic and social reforms. In addition the present implementation of the Lisbon strategy is accompanied every year by conflicts of competence in and between the various institutions at all levels. Too often, joint decisions which have been reached among the Member States are forgotten when it comes to national policy making. This means that a multilevel governance system is needed that enables its various levels (i.e. European, national, regional and local) to interact and to properly implement the Lisbon strategy. It is of great importance to create a culture of dialogue among the different levels and policy fields concerned. In addition, a differentiated approach is needed for new Member States, at least in the beginning of the “enlarged” period by introducing structured conclusions with key messages and clear guidance for the new Member States.

An optimal policy mix would maximise European citizens' preferences, not those of governments. In the European Union this is not the case today. The policy agenda of the Lisbon strategy is largely defined through deliberation in the Council with governments accountable to national and not European constituencies. Political competition takes place within Member States and administrations guarding their competences. As a consequence, national interests predominate over collective European interests. Therefore what is needed is an economic, social and environmental governance with a reformed public administration. In practical terms, this means that all policy competences for collective goods must become a matter of co-decision with the European Parliament, and national parliaments have to follow-up the Lisbon strategy in all areas. Consequently, we have to develop a coherence between the different policy-making decision instruments such as the method of open co-ordination, legislative co-decision procedures and economic co-ordination. As a result of setting up the EMU there is a large new class of collective goods, which 62 cannot be efficiently provided by voluntary co-operation between national governments alone. They require not only policy co-ordination through hard rules to contain deviating behaviour, but also full democratic legitimacy and legislative decisions for their definition and implementation.

Therefore, there is an urgent need to increase the transparency, participation and democratic legitimacy of the Lisbon strategy. Moreover, from 2003 onwards, the accession countries will be called upon to share the goals set in the Lisbon strategy. This includes extending the European economic and social model to the new EU countries, and integrating them in the modernisation and reform of the European economic and social model. It is of great importance to engage the enlarged European Union in implementing the objectives and mechanisms of the Lisbon strategy with strong democratic legitimacy, including the participation of the Social Partners and Civil Society. The main concern regarding the Lisbon strategy should now be to start to translate it at national and regional level, and to convert it into an agenda for European citizens and civil society. This process should be supported by a European-wide information campaign on the objectives and targets of the Lisbon strategy.

Concrete measures to strengthen the Lisbon strategy 2004

 to establish a concrete implementation review, including a scoreboard at national level, indicating Member States’ progress towards the implementation of the Lisbon objectives at national and local level

 to provide detailed information on the implementation of the “growth programmes” and to ask for national budget allocations and “growth programmes” at a common time in each Member State

 to provide clearly structured conclusions with key messages and supportive institutional infrastructure for new Member States in order to respect the specific conditions related to the implementation of the Lisbon strategy in those countries and to develop a balanced approach of implementation between the present and new Member States

 to provide training and exchanges of best practice for public administrations in order to assist them with the implementation of the Lisbon strategy

 to regularly involve the European Parliament and national parliaments by participating in the ex-post assessment of the results obtained

 to launch an initiative for better information and public participation in the implementation of the Lisbon strategy by establishing information tools for Civil Society and the wider public.

63 MOMENTUM FOR RECOVERY IN EUROPE PROMOTING PUBLIC AND PRIVATE INVESTMENTS

Funding and financial ambitions for more growth in Europe

tabled by PES Rapporteur, Poul Nyrup Rasmussen

Brussels, December 2003

64 65 In Thessaloniki, in June 2003, the European Council endorsed “the Commission's intention to launch an initiative in co-operation with the European Investment Bank to support growth and integration by increasing overall investment and private sector involvement in TENs and major R&D projects”. It called for this work to be taken forward under the EU Italian Presidency.

Member States share the objectives inspiring the European Commission’s Initiative and, since Thessaloniki, have started to prepare concrete proposals for action. Italy presented its ideas before the summer of 2003, focusing primarily on reinforcing transport links. France and Germany, in a joint presentation in September 2003, confirmed their commitment to the Lisbon reforms and identified ten investment projects, grouped around TENs, R&D, and environmental and educational developments.

The European Commission presented its proposal (interim report) for a "European Growth Initiative" at the end of September 2003, highlighting and promoting certain key investment activities in the fields of TENs, telecommunications, R&D and technical innovation. This Initiative should provide further impetus to the Lisbon Strategy through addressing current gaps in Europe’s physical and knowledge infrastructure, seeking to give a selected boost to investment, and improving the regulatory framework and public support in order to encourage businesses to innovate and invest. The "European Growth Initiative" represents a partnership for investment in networks and knowledge. Furthermore it should fully take into account investment in human capital, the environmental and sustainable development aspects, and it should promote the development of clean technologies, which offer important opportunities in terms of growth, employment and social welfare.

To this end the European Council in October 2003 endorsed the principles of the proposed "European Growth Initiative" and invited the relevant actors to take it forward along the lines set out it. However, the Initiative To this end the European Council in October 2003 endorsed the principles of the proposed "European Growth Initiative" and invited the relevant actors to take it forward along the lines set out. However, the Initiative should be consistent with the Lisbon strategy and in line with the commitments in the Broad Economic Policy Guidelines and in the European Employment Guidelines 2003-2006. In order to achieve the rapid progress necessary to make a definitive assessment of the Initiative and take concrete decisions at its December 2003 meeting, the European Council invited the Commission, the EIB and the relevant formations of the Council to establish a "quick-start programme" identifying a list of investment projects in an enlarged Union. At the same time, the European Council invited the Member States to complement the "European Growth Initiative" by "national growth programmes".

This paper is presented by the Socialist family as a contribution to the implementation of the "European Growth Initiative" and seeks to strengthen short-term confidence and to consolidate our potential for growth and employment. It is time for the European Council, Commission and the Member States to give a strong signal of timely economic governance in order to boost confidence, prevent the risk of a downturn and consolidate economic recovery.

Consequently, the main purpose of this paper is to present new ambitions for adequate funding instruments and financial support mechanisms for more growth in Europe. Furthermore it will show throughout an assessment of the economic effects and concrete calculations – documented in an annex to this paper – that the following funding and 66 financial ambitions will help to achieve better the objectives of the Stability and Growth Pact and will promote the European-wide potential for growth and employment if measures will be taken in a co-ordinated way and timely together from all Member States.

The main question is now: How can we guarantee that, after the political go-ahead, the planned promotion of the potential of growth and employment will be achieved? The Socialist family would like to focus on a five short-term plan up to 2006 in order to keep all promises:

67 A FIVE-POINT PLAN

1. Mobilising European financing resources through full spending of the EU budget in line with the Lisbon objectives

 to go beyond the current European-wide public spending limit of 0.8 % of GDP, whilst insisting that there is room for manoeuvre in spending between 1% and 1.27% of GDP 2004-2006 in line with the present financial perspective 2000-2006 and the Lisbon objectives as well as with the promotion of private investment activities;  to have an "ambitious" spending limit and a major “redirection” of total expenditure between the various headings must better reflect the major political priorities set for 2010 through an initial heading entitled "growth, competitiveness and cohesion" containing all internal policy instruments and structural funds.

2. A growth promoting European monetary policy

 to avoid a deflationary situation right from the beginning of positive economic developments and to restore economic confidence at the same time by avoiding marginal interest rate cuts or even increased interest rates;  to assess whether the present inflation target is optimal for growth in Europe.

3. Strengthening the contribution of the EIB through full use of loan capacity

 to increase the advisory and technical support of the EIB to Member States and to the private sector, in particular to SMEs, promoting development of PPPs both at policy and project level where appropriate as well as private investment;  in line with the Lisbon objectives, to invest further in projects which, because of their characteristics, especially the risk and clean technology involved, cannot be funded by commercial banks and the capital markets by developing specific instruments to meet the needs of SME investment projects and risk-capital projects that exceed the global loan ceiling of the EIB.

4. Redirecting national public expenditure towards the Lisbon objectives

 to set up a clear method that includes a definition of ‘high-quality public expenses’ to quantify public budgetary positions and their contribution to growth and investment with a view to making a positive contribution to the Lisbon objectives;  to link more closely the quality of public spending within the framework of the European Structural Funds with all Lisbon objectives during the second phase of the programme period 2000-2006 and should be comparable in all Member States.

5. Better co-ordination of high quality public spending between Member States

 to provide detailed information on the use of public spending as a contributor to sustainable economic growth, competitiveness, environmental sustainability and social cohesion within the national “growth programmes”;  to issue the national budgets and “growth programmes” at a common time during each year and with comparable information between Member States.

68 1. Mobilising European financing resources through full spending of the EU budget in line with the Lisbon objectives

At the end of October 2003, the European Commission proposed that € 5 billion of unused appropriations in the framework of the implementation of the European Structural Funds from the 2003 EU budget, be returned to the Member States. It is unfortunate that Member States sent their final payment claims only at the last minute - and often they were incomplete so that the payments cannot be implemented as planned. This is certainly welcome for the national budget planning of the Member States, and will result in a substantial reduction of Member States' contributions to the EU budget. However, in this context we have firstly to stress that if the EU has new ambitions, such as the "European Growth Initiative", we must go beyond the current European-wide public spending practise of 0.8 % of GDP, whilst insisting that there is an agreed spending limit of 1.27% of GDP 2004-2006 in line with the present financial perspective 2000-2006 and the Lisbon objectives as well as with the promotion of private investment activities.

The financial perspective is a framework agreed by the European Parliament, the Council and the Commission laying down, subject to the ceilings on own resources assigned to the EU, maximum amounts by major heading of expenditure within which the annual budget must be established over the period in question. It translates into financial terms the priorities set for the Union's policies and is at the same time an instrument of budgetary discipline, and it also determines the limits on the financing of the EU budget. The classification of Community expenditure by financial perspective heading is based on a policy approach.

In view of the already ongoing discussion about the new financial perspective 2007-2011, the succession of budgetary rows prompted the Community institutions to agree on a method to improve the operation of the budgetary procedure while at the same time guaranteeing that budgetary discipline should be maintained. However, an "ambitious" spending limit and a major “redirection” of total expenditure between the various headings must better reflect the major political priorities set for 2010. We would therefore also stress the need to reorganise the various categories of the EU budget to accord greater priority to the implementation of the Lisbon strategy. This could entail the hypothesis of an initial heading entitled "growth, competitiveness and cohesion" containing all internal policy instruments and structural funds.

These proposals are based on an even more active role by public authorities at national and Community level in promoting private investment activities as well as creating growth and employment in Europe. It exploits any further room for manoeuvre offered by public resources at Community level within the current Financial Perspective in order to mobilise private funding for priority Community-wide private and public investment projects.

2. A growth promoting European monetary policy

In a system like the eurozone, monetary policy play a crucial role in stabilising growth and employment. The ECB, like any other economic policy actor, is confined to support the general goals of sustainable growth and full employment of the European Union and to make comments and to give advice in this respect. In any case, as soon as price stability is seen to be affected, the ECB can react to decisions by adjusting interest rates according to its view. The ECB has not in all aspects lived up to this 69 responsibility, the slowness with which interest rates have been lowered during the downturn has been detrimental to European economy. The policy pursued by the American Federal Reserve has in this respect been more proactive, which has been beneficial for the US economy.

All indicators have pointed to a decision to lower interest rates more significantly. The outlook for growth is far below the ECB´s own estimate of potential growth, so that the output gap has increased. The strong growth of monetary aggregates has been correctly dismissed by the ECB as the consequence of insecurity in the stock markets, which has induced investors to shift their money into more short term assets. The ECB should be careful to assess the impact of public deficits correctly.

However, in future it is important that monetary policy in Europe from the outset vigorously combats deflationary tendencies. Therefore it is now time for monetary policy to avoid a deflationary situation right from the beginning of positive economic developments, and to restore economic confidence at the same time. In the current situation it is important that the still weak upturn is allowed to gather momentum before any tightening of monetary conditions takes place. This is especially important in the light of the strong appreciation of the euro, which risks hampering the much needed pick up in European growth. This requires a responsible interest rate policy and not marginal interest rate cuts or even increased interest rates. In the Euro area short term rates should go down. Then the expansionary impact of ECB monetary policy would be almost as strong as that of the FED.

Monetary policy in the Euro area is guided by the inflation target the ECB has set itself. This target is asymmetric and tighter than any other inflation target guiding central banks in other currency areas. Five years after the launch of the euro time is becoming ripe for assessing whether this inflation target is optimal for growth in Europe. The ECB must make a stronger contribution to a global recovery, which has its roots also in the Euro area, through a monetary policy which promote growth and employment in Europe.

3. Strengthening the contribution of the EIB through full use of loan capacity

The EIB plays a major role as a stabiliser during economic slow-downs. Projects account for some 5% of total investment in the EU and are estimated to generate each year some 380 000 jobs in the development of infrastructure and 40 000 jobs in SMEs. The EIB provided for 25% of the European risk-capital market, serving as a catalyst for overall investment of around € 3 billion in all Member States plus Accession Countries. Furthermore the EIB exerts a catalytic role in mobilising investments by commercial banks or the European Structural Funds. The EIB has played a particular role in taking forward both TENs and in supporting progress towards the Lisbon goals.

The EIB raised its capital 2002 from € 100 billion to € 150 billion. This increase is being financed from the EIB reserves, consequently avoiding recourse to Member States' budgetary resources. The EIB's capital is subscribed by the Member States in accordance with their economic weight. Only 6 % of the capital is paid in, the remaining 94 % act as guaranteed capital. As from 1 January 2003, the statutory ceiling on loans has risen to € 375 billion which should provide the Bank with headroom to cater for the growth in activity from its own resources over at least five years.

Analysing the only slight increase in the total volume of loans signed by the EIB of 39.6 billion in 2002, as against 36.8 billion in 2001, it seems 70 apparent that not so much the EIB’s capacity, but missing private investment activities and budgetary constraints connected with the SGP keep Member States from using to the full the potential role of the EIB as an engine for investment, and thus growth and employment. As at 31 December 2002, outstanding lending from own resources and guarantees amounted to € 234 billion.

For many years, support from the EIB has been identified as a key factor in ensuring the financial viability of longer-term investments, and particularly in providing the basis to mobilise private funding and structure public-private partnerships (PPPs). We would therefore stress the need to reinforce its advisory and technical support to Member States and to the private sector, in particular to SMEs, in promoting development of PPPs both at policy and project level where appropriate as well as private investment, in order to ensure full use of its loan capacity for public and private investment activities.

Furthermore, in line with the Lisbon objectives, the EIB should invest further in projects which, because of their characteristics, especially the risk and clean technology involved, cannot be funded by commercial banks and the capital markets. In this context we would welcome proposals for specific instruments to meet the needs of SME investment projects and risk-capital projects that exceed the global loan ceiling of the EIB.

4. Redirecting national public expenditure towards the Lisbon objectives

The sharp fall in public and private investment alike –2.3% in the euro zone and 2.4% in the European Union as a whole – has further weakened growth. One major issue is therefore to identify how to increase and define "high quality" expenditure in the interests of increasing investment activities in Europe. Public expenditure could be considered as ‘high quality’ if it makes a positive contribution to the goals of the Lisbon strategy, i.e. making the Union the most dynamic, competitive, knowledge based economy, enjoying full employment, strengthened economic and social cohesion and environmental sustainability.

EU budgetary surveillance was extended to the systematic assessment of the sustainability of public finances in the light of ageing populations, showing the potential risk for emerging budgetary imbalances in many Member States. However, public spending on the basic functions of the State (defence, justice, education, health care, R&D, clean technology, economic services) has remained remarkably stable over the past 30 years, and is very similar (between 14% and 16% of GDP) across Member States. Surveillance of the quality of public finances is still at an early stage. The difficulty in putting in place an effective monitoring of the quality of public spending is due to the conceptual difficulty in defining what ‘quality’ actually means, and the lack of timely and comparable data.

We therefore call for a clear method that includes a definition of ‘high-quality public expenses’ to quantify public budgetary positions and their contribution to growth and investment with a view to making a positive contribution to the Lisbon objectives, and we hope that the list of structural indicators will form an integral part of the budgetary surveillance framework and of national stability and convergence programmes. In this regard, and as a first step, the quality of public spending within the framework of the European Structural Funds should be more closely linked with all Lisbon objectives during the second phase of the programme period 2000-2006 and should be comparable in all Member States.

71 5. Better co-ordination of high quality public spending between Member States

The institutional developments in economic policy-making reflect the recognition that a proper functioning of EMU requires a well developed coordination framework. This requirement is derived from the fact that although monetary policy is fully unified under the authority of the ECB, most other policy areas maintain separate national policy-making competences. Because policy preferences are defined in national constituencies, different governments have different preferences and objectives. But at the same time the growing interdependence between national economies within the same monetary framework has led to an increasing range of spillovers into other jurisdictions. What one Member State does, in particular in the field of public spending, increasingly affects all others and inconsistent policy objectives would lead to welfare lowering outcomes. The internalisation of these externalities creates the need for better policy coordination of high quality public spending. It means that an efficient policy mix is a necessary condition for the sustainability of macroeconomic stability. Therefore budgetary policy needs to be constrained.

To this end, national “growth programmes” should provide detailed information on the use of public spending as a contributor to sustainable economic growth, competitiveness, environmental sustainability and social cohesion. Special emphasis should be put on government investment expenditure in a wider sense (e.g. infrastructures, research, education and training), with particular attention to be paid to possible synergies among national and Community-wide public and private investment efforts, as well as on ways and means of stimulating a common investment policy. To make such an exercise most effective, national budgets and “growth programmes” need to be issued at a common time during each year and contain comparable information between Member States. Equally, those programmes should mirror political commitments made within the broad economic and employment guidelines, as well as policy objectives in the field of economic, environmental and social reforms (Lisbon and Göteborg Strategy).

Summarized and following the assessment and calculations of the economic effects (see annex), the promotion of investments in Europe will increase growth and employment considerably. According to the calculations in this paper the initiatives will increase growth by almost 1 percent per year in the period 2005- 2007 and additional almost 0,5 percent per year up to 2010. The effect can be even larger if the initiatives increase confidence in the private sector in Europe.

Up to 2010 the initiative will create 3,4 million jobs and when the effects are fully absorbed in the labour market the effect can be up to 4,7 million jobs. As the plan promote both public and private investment there will be no negative effect on the general government budget. Increased spending in the public sector is more than outweighed by increased public income from taxes and public savings from smaller expenditures on social benefits.

72 THE ROMA: DISCRIMINATION AND EXCLUSION

tabled by PES Vice President, Jan-Marinus Wiersma

November, 2003 74 Introduction

In today’s European Union, there are Spaniards, Dutch, Germans, Britons, Swedes, Greeks etc., as well as Sinti and Roma. These last two groups are very often referred to as "gypsies". Most people belonging to these groups dislike this term because the word "gypsy" is originally a term of abuse and is associated with negative connotations and stereotypes.

People belonging to these groups use the name "Roma" in their own language and the name is a link to their fascinating cultural and historical background. The term Sinti is used in parts of Western Europe. This group is related to the Roma, but settled in this part of Europe hundreds of years ago and speaks a different language.

The enlargement of the European Union will eventually bring in between five and six million people of Roma origin living in countries like Slovakia, the Czech Republic, Hungary, Romania and Bulgaria. Their lives are wretched as a result of discrimination and social exclusion.

When it comes to solidarity, social justice and equal treatment, the European Union has to live up to its reputation. The Roma is therefore a test case for the EU’s values and policies. For this reason, the PES has put the issue on its agenda. The extent to which an enlarged Union succeeds in improving the plight of the Roma may also be considered as a test of Europe’s social and democratic identity.

This paper looks at the following questions: - What conditions are they living in and what problems are they facing at the moment? - What is Europe doing to improve their plight? - What prospects are there for the Roma in an enlarged EU?

Although we often talk about the terrible situation of the Roma in the new and future Member States, this does not mean to say that all is well with the Roma and Sinti living in the European Union of 15 Member States. This report, however, focuses on the situation of the Roma in Central and Eastern Europe.

This paper does not address directly the question of migration or the fear of mass migration, the chances of which appear slim. It concentrates on other issues of substance. The Roma in Central and Eastern Europe ceased to be nomads many years ago and hardly move around in their own country. Contrary to what the alarmists would have us believe, there are not huge numbers taking advantage of existing opportunities to come to Western Europe. There would be even less of an incentive to do so, if there were less discrimination and if their socio-economic circumstances improved.

Short historic background

Although this report is about Central and Eastern Europe, we cannot and should not overlook the cruel fate suffered by the Roma and Sinti in Nazi Germany. During this period these minority groups were subject to increasingly restrictive measures based on arguments relating to internal security, fighting crime, antisocial behaviour and, in particular, race. The basic idea was that there was no room for them in German society. This was reinforced by locking them up in concentration camps (in which hundreds of thousands of died) and subjecting them to a policy of forced sterilisation. The Sinti and Roma people were considered to be social outcasts.

After the Second World War, the majority of European Roma disappeared behind the Iron Curtain. There was some hope that their terrible situation would improve under the communist regimes, but this soon proved unfounded. Russia pursued a policy of denationalisation and there was, therefore, no room for expressions of ethnic identity. Nomadic behaviour was not exactly welcome in the ‘Big Brother’ states of the Eastern Bloc. No-one was allowed to escape the control of the party and the state. If there was any sense of the seriousness of the Roma’s situation, the blame was put on the earlier capitalist regimes. Because of their ‘commercial’ past the Roma were seen as infected by a capitalist mentality and in need of help. However, the communist governments in turn were unable to bring to the Roma communities the ‘fruits of social transformation’ and merely pursued a policy of enforced settlement. This was the origin of the Roma’s sedentary existence in Central and Eastern Europe. In the 1960s, there were admittedly improvements in housing and education, but these did nothing to overcome the prejudices and resentment expressed by the rest of the population against the Roma. Nevertheless, there was work for the Roma and some of them used the educational opportunities on offer to gain advancement. As a result, a small but important intellectual elite emerged.

The communists’ plan for the Roma to disappear as an identifiable population group turned out to be counter-productive and consequently a practice of repression and segregation developed. The Roma were still outcasts and the rest of the population continued to react negatively towards them.

After the Berlin Wall came down in 1989 and with the revival of democracy, the Roma were for the first time given the chance to organise themselves. This was reflected, notably, in the development of political and cultural organisations. However, the social prejudice against them did not disappear: in fact quite the reverse took place. The number of racist incidents grew and the Roma also suffered economic decline. The introduction of the free market economy led to the disappearance of many ‘superfluous’ jobs, particularly in state enterprises where the predominantly poorly-skilled Roma tended to work. This led to a massive increase in unemployment and a further deterioration in their social circumstances. Consideration for the situation of the Roma did not fit in with the market-orientated philosophy of the first democratic governments in Central and Eastern Europe. The prevailing view was that the Roma should solve their own problems.

A unique minority

Recent estimates indicate that there are at least 8 million Roma living in Europe, including almost 6 million in Central and Eastern Europe. In some of these countries, the Roma account for over 5% of the total population and there are also sizeable groups living in the Balkans. Some 1.5 million Roma and Sinti live in the European Union of 15 Member States. However, there are no precise figures regarding the number and location of the Roma population because many are not registered. The lack of data makes it difficult to develop effective policies and to combat

76 certain prejudices. The Roma are often accused of criminal behaviour, but there are no statistics to show that they are any more criminal than other people from the same socio-economic background. Registering the Roma separately in order to obtain more information is also difficult to reconcile with fighting discrimination.

It is not easy to characterise the Roma. The group encompasses a rich diversity of cultures, languages and lifestyles and as such is not homogeneous. In Western Europe there are still itinerant groups, but in Central and Eastern Europe the Roma usually tend to be permanently settled in one place. The majority live in poverty, but there are also some who belong to the middle classes and enjoy a very reasonable standard of living. Although, there are Roma still living in fairly traditional, rural conditions, many live in towns, very often in urban ghettos.

This diversity is more of a problem for the rest of the population, who often do not know how to deal with it, than it is for the Roma. Even though they tend to identify with different sub-groups rather than with the group as a whole (not all Roma call themselves ‘Roma’), they nevertheless feel a common bond. The fact that they all face the same prejudices and negative attitudes strengthens that bond.

Their broad diversity and wide geographical distribution make the Roma a special sort of minority. They do not have traditional characteristics such as their own territory or an obvious origin, in contrast to other groups such as the Hungarian minority in Slovakia. For this reason, they depend on the common attributes of ethnic origin, historical background and certain cultural characteristics.

The term Roma is developing a new meaning. Emphasising their own ethnic identity has become a way of giving a collective response to the widespread discrimination that they suffer. An attempt is also being made to make the new consciousness of the Roma an organisational framework for this extremely diverse group. Most Roma leaders do not want their own state, but they want to put a stop to the social inequality that they suffer, as well as a recognition of their group’s specific rights.

There is disagreement within the Roma elite about the status the Roma should give themselves. There are two distinct trains of thought. The first is that the Roma should be seen as a national minorit y. Supporters of this approach think that they should be given this status officially. This would involve protection by the state and benefiting from the same rights as those of other national minorities. However, this situation could vary from country to country, since the protection provided depends on the respective national legal system. The main argument for this approach is that it would be discriminatory to have a special status for the Roma. They must be given exactly the same rights as other minorities, because otherwise they run the risk of being seen as second- class citizens.

The second approach involves giving the Roma a separate, transnational minority status. Representatives of this group put greater faith in Europe than in their national governments. The Council of Europe regards the Roma as a traditional, non-territorial minority who need special European-level protection because they are the victims of discrimination and human rights violations all over Europe. The national reports by the ECRI (the European Commission against Racism and Intolerance) give an idea of the scale of the current discriminatory practices against the Roma in all the member countries of the Council of Europe and in all areas of life in society. For this reason, the Council of Europe is trying to protect the Roma, who are first and foremost European citizens, against discrimination and racism. Given that not enough is being done at national level to bring about this change, cooperation and pressure from the international community is deemed necessary.

The view that the Roma constitute a transnational minority has a certain logic. Many Roma see this cross-border approach as a guarantee that they will be able to exercise their rights. To be successful, this approach has to be combined with improvements in national policy given that the Roma are still citizens of a particular country. The Hungarian minority in Slovakia can rely on Hungary's support. In contrast, the Roma can only depend on Europe for this kind of support.

Modern Roma life

Let us examine the current position of the Roma in more detail, beginning with the phenomenon of discrimination. This is nothing new and is not confined to Central and Eastern Europe. Nevertheless, it might be said that the treatment of the Roma, whose history is one of continual discrimination up to the present day, is unusual. In the difficult socio- economic circumstances after 1989, they play the age-old role of the black sheep. In the new democracies of the new Member States, there is sometimes a sort of inverse solidarity as a reaction to the old system, with a ‘winner takes all’ attitude. Minorities are sometimes treated in the same negative way as the political opposition. This is reinforced by the fact that the Roma often isolate themselves from the predominant culture. This isolation is often a reaction by the Roma to centuries of exclusion.

Politicians also often help to perpetuate such negative feelings in order to win votes. This mainly applies at a local level, but even national politicians are sometimes able to play this card to their advantage, such as the extremist nationalist candidate for the Romanian Presidency Vadim Tudor. In these situations, the Roma tend to be the main targets of racist activism and this comes in various forms. For example, Romania is known for its pogroms; in the Czech Republic and Slovakia, we mainly remember the skinhead attacks. The local authorities also have a bad reputation in some cases.

Complaints about violence and unfairness against the Roma often concern the police and the courts. For this reason, many of the Roma consider their lack of personal safety as their greatest cause for concern. In some cases, the police act as their enemy and thus they feel completely unprotected.

Although some of the worst abuses appear to be a thing of the past, the mentality has not changed. The governments of the countries concerned now seem to have taken stock of this situation and are taking measures to combat discrimination at all levels of government. These measures are partly due to pressure from the European Union and international commitments. However, merely adopting legislation and other measures is not sufficient. You can put anything on paper, but it is only when policies are implemented in practice that we can assess whether they have had the desired impact on behaviour.

78 Discrimination against the Roma is directly linked to their marginal social position and exclusion. This is a phenomenon that no-one can fail to notice. It is prevalent in the particularly important area of education. There is nothing more damaging to the Roma’s situation than lagging behind in this field. The number of Roma children attending school is extremely low. This means that they do not obtain the skills they need to enter the labour market, which is in turn one of the main causes of the high rate of unemployment among the Roma.

Some Roma see the education system as hostile to their culture and are therefore suspicious of it. This is because the education available gives little consideration to the special situation of their children. School is an unappealing, alien environment compared to the intimacy of the family. In particular, language is a problem. There are often no teachers who can speak Romany and consequently the children often end up in separate classes. This leads to a form of segregation that should be condemned as a violation of human rights. This separation also tends to strengthen people’s prejudices about the Roma. For example, other parents sometimes remove their children from schools with a Roma majority. In some cases, Roma children are even sent to special schools for the mentally handicapped.

Poverty is also a major factor. Many parents cannot afford to send their children to school. Girls often marry young and are consequently unable to finish their education.

All of these factors help to keep the numbers attending school very low. The obstacles are considerable, the results discouraging. And for the Roma, a qualification is certainly no guarantee of a job.

Both within and outside their community there is now a strong sense that improvements are urgently needed. Education is sometimes considered as a form of cultural colonialism, however it is the key to emancipating the Roma. In order to improve this situation, there needs to be improvements in language teaching, more attention should be given to schools for the Roma culture and the Roma themselves could play a more active role in teaching.

Education is a central element in shaping the cultural relations between the Roma and those around them. More so than with other minorities, there is a sort of invisible wall separating many of them from the external world, even though some manage to scale it. The phenomenon of this invisible wall is due to the way in which the Roma are treated.

Fortunately, within the younger generation, there are more Roma who are better educated and who are prepared to put up a better defence of the Roma’s interests to the local authorities and governments. This is a huge step forward. The revival and strengthening of the Roma culture, which has made major contributions to Europe’s cultural wealth in the past, could serve to promote the emancipation and full involvement of this minority in society. This in turn could help stop the group's isolation.

Roma leaders should speak out more openly about how their community works. Greater transparency would make them less mysterious and this would create a psychological bridge with the outside world. In turn, those around them will be encouraged to find out more about the world of the Roma in order to gain a better understanding of how they think. There are plenty of examples of local initiatives where this type of cooperation has proved effective.

Education is the main area of concern, but the problem of exclusion also features in other areas. Unemployment among the Roma is very high, generally irrespective of the rate of unemployment in the country in which they live. Discrimination by employers, including authorities, is one of the main causes. Research by the World Bank amongst others shows that the Roma are often barred from applying for jobs. Under the communists they were employed in state enterprises or government institutions. After 1989, they were the first to be laid off as a result of reforms. The fact that many of them are poorly skilled is another reason for their weak position in the labour market.

It should be noted that official statistics conceal the fact that many Roma are traditionally active in the grey economy, for example as traders or musicians. This is often the only way they can earn money, since many of them are excluded from social benefits as a result of indirect discrimination, such as problems with their personal documents.

The Roma’s housing problems increased considerably after 1989. Many lost the houses that they had been allocated under the old regime and they could no longer count on help from state enterprises. If they fell behind with the rent, they were immediately evicted, something to which they were not accustomed. Those who neglected the houses they owned suddenly faced problems, since their houses were claimed by other people. Many who lost their houses in this way sought shelter illegally elsewhere without being registered with the authorities, usually with their families, but this often led to local overpopulation. Living somewhere illegally can result in the loss of other rights and the often intolerable situations tend to generate negative reactions from the rest of the population. Sometimes this led to the Roma being transferred to particular districts, which then rapidly took on the appearance of ghettos.

Many Roma do not have adequate access to health care, so generally their health is considerably below average. They suffer from diseases that no longer occur elsewhere, such as tuberculosis. Their infant mortality is relatively high and their life expectancy low. In Hungary, for example, the Roma live on average 10 years less than the rest of the population.

A turning point?

It seems clear that the restoration of democracy and the introduction of the rule of law in Central and Eastern Europe has brought little benefit to the Roma. The impression is that they have little in these societies that they can rely on. Fortunately this is not the case, but they often unaware of their rights. This is why it is important to strengthen Roma organisations working in this field.

80 Discrimination is banned, but governments and other actors do not always obey the rules designed to protect minorities. What are these rules?

Laws and conventions to combat discrimination and to ensure equal treatment have been adopted at international, national and regional levels. Discrimination on grounds of race or ethnic origin contravenes the fundamental principles of international law. Equal treatment and non-discrimination relate not only to civil liberties but also to cultural, economic and social rights. The international rules ban both direct and indirect discrimination. Direct discrimination means that a person is penalised because of their race or ethnic origin. Indirect discrimination occurs when, for example, neutral rules prejudice people of a different ethnic background or race.

For Europe the European Convention on Human Rights (ECHR) is extremely important. It requires Member States to take steps to protect persons who are subject to persecution, discrimination, violence and hostility on the basis of their language or their ethnic, cultural or religious identity.

All new Member States prohibit discrimination to a certain extent, partly because of the direct applicability of international human rights conventions in their respective constitutions. Their EU membership obliges them to introduce all relevant EU legislation.

A large number of countries has signed up to the Council of Europe's Framework Convention for the Protection of National Minorities. It states that signatories must guarantee those belonging to national minorities (such as the Roma) the right to equality before the law and to equal protection.

There are various institutions in Europe which are working to improve the situation of the Roma. Since 1996, the Council of Europe has had a specialist group on the Roma, but has been involved with their problems for much longer. In the mid-1980s a member of its parliament asked the Council of Europe whether the European Convention on Human Rights applied to the Roma. From today’s perspective, asking this question seems absurd because its affirmative answer is so obvious. However, the fact that it was asked gives us a good indication of how little importance was attached to the Roma's situation at the time. Initially the Council of Europe mainly dealt with problems relating to housing and education (in conjunction with the EU on the latter). In the early 1990s, there was a move towards to a more integrated approach. For the first time in history, the Roma were involved and consulted in these discussions.

The Organisation for Security and Cooperation in Europe (OSCE) is also working on the plight of the Roma. In 2000, the then High Commissioner on National Minorities, Max van der Stoel, produced a detailed report on the situation of the Roma. The High Commissioner’s remit primarily covers conflict prevention. It is thus particularly striking that he has done so much work on this minority, given that it does not involve conflict. He obviously considered the situation sufficiently serious.

All OSCE member states have signed international treaties and conventions banning discrimination. However, in the High Commissioner's view, many OSCE members fail to fulfil their obligation to guarantee the integrity of the Roma. According to the relevant international agreements, states must not only refrain from discrimination, but must also take positive action to guarantee the rights of the individual. States must also avoid undesirable red tape. Adhering to the principle of formal equality, as opposed to giving special privileges, is not a good approach because it strengthens the position of the majority in relation to the minority. This powerful plea for more positive discrimination will hopefully achieve the desired results.

The European Union only became interested in the Roma when it started the process of enlargement towards Central and Eastern Europe. Policy on minorities is a national responsibility in the EU and effective European legislation to combat discrimination has only just got off the ground. However, these issues were given significant attention during accession negotiations in order to ensure respect for human rights and to prevent existing problems with minorities from becoming a burden for an enlarged EU. It is to be welcomed that the first condition for EU membership is the existence of stable institutions safeguarding democracy, the rule of law, human rights and respect for minorities. The Roma will, as EU citizens, be able to rely on European anti-discrimination legislation, which will allow them to bring proceedings against their own governments before the European Court of Justice in Luxembourg.

Within the larger territory of the Council of Europe, people can take legal action to the European Court of Human Rights in Strasbourg, which deals particularly with the issues of human rights and discrimination. Increasing numbers of Roma cases, such as the segregation of Roma children in the Czech Republic, are coming before the Court.

In the run up to enlargement, the European Commission was responsible for monitoring compliance with the requirements that the EU had imposed on the acceding countries of Central and Eastern Europe. Its first reports clearly showed that, although the situation of minorities was generally improving, this was not the case for the Roma. The Commission alerted several countries to the lack of measures to combat poverty amongst the Roma. The European Council (the Council of EU heads of State and Government) adopted a document in 1999 setting out the measures which the acceding countries were expected to take. This severe criticism, supported by the European Parliament, forced the countries in question to take the Roma issue more seriously. As a result, many started to formulate policies on the Roma. Although there has still not been sufficient consideration given to the scale of the problem, at least these government policies are beginning to be implemented. The EU must keep up the pressure in order to speed up this process. The European Parliament approved the membership of a number of countries only after they had presented their strategy and plans to improve the situation of the Roma. We cannot expect the new member states to solve the problem in just a few years, but progress needs to be made.

The EU tends to place responsibility mainly in the hands of the countries concerned, but the question is whether this can continue after enlargement and in the long term.

Conclusion

The Commission has provided a lot of money – many billions of euros a year – for the acceding countries. Only a small percentage of these

82 funds have been allocated to Roma projects. However, after enlargement this situation will improve because many Roma live in poor regions, which will soon be able to apply for funding from the main EU funds.

It is easy to blame our Eastern European partners for discriminating against the Roma and showing too little solidarity with them. The case of the Roma is, in a sense, a reflection of our own problems in dealing with a multicultural society. In wealthy Western Europe, we have more resources to take measures, but very often these fail to deliver changes. This also applies to the Roma, as we can see from their situation in France, Greece and Spain.

This is a multicultural issue that will not be resolved overnight. It is a question of adapting or not adapting. Even in the old EU this is a complicated issue. What are the general rules that should be obeyed and where can exceptions be made on cultural grounds? Some Roma appear to fear the official culture as undermining their own and there is some historical justification for their mistrust. However, by isolating themselves, they often miss opportunities to emancipate themselves. There is disagreement within the Roma community itself. The younger generation has a more open attitude than the older. Some want greater recognition of their cultural identity; others want recognition as a territorial or a non-territorial minority.

The Roma community contains a wide range of groups and sub-groups which live all over Europe. It is logical that, just as in our own democracy, there should be different movements and attitudes. Whilst recognising this diversity, it is essential that the Roma be represented at European level in order to facilitate consultation and cooperation.

Political participation for the Roma is an absolute priority. There should be improvements in this situation, particularly at national level, where the number of Roma MPs can be counted on the fingers of one hand. These is partly the responsibility of the existing political parties, which often do not put Roma on their lists of candidates, fail to actively seek suitable Roma candidates or put them forward for unelectable positions. However, it is also the responsibility of the Roma communities, which often find it difficult to identify with representative democracy. Who should represent whom? Training Roma leaders in political skills could help to resolve this problem.

The problem of discrimination against the Roma exists here and now. The Council of Europe and the OSCE continually remind their member states that such discrimination is unacceptable. It is usually not the governments of the countries concerned that are at fault. They are working, with the help of the EU, to set up anti-racism programmes to change attitudes at all levels of government and in all sections of the population. They have introduced legislation to combat discrimination along the lines of what will apply in the EU. However, it should be stated that measures introduced at the top in political circles (as notified to their friends in Western Europe) often take a long time to or fail to filter down to the grassroots level. For example, policies and initiatives formulated in Bratislava are not always in the interests of local politicians, who fear that too much positive discrimination will lose them votes, particularly in areas where there is an unusually high concentration of Roma people. This paper is about the Roma in Central and Eastern Europe. It is about discrimination and exclusion and what should be done to combat them. Prejudices against the Roma are only gradually being overcome. Discussions on the subject with our friends in Eastern Europe are often difficult. When making recommendations to the new Member States, a certain amount of tact is required. Combating poverty in a relatively poor country is more difficult than in many of the prosperous countries of the EU of 15 Member States. Are we really the ideal example of a multicultural society? Sinti and Roma do not have an easy life in the EU of 15 Member States either, often suffering from discrimination and exclusion. Their civil rights are not always guaranteed and we refuse to allow their relatives across our borders.

But the situation is not hopeless. Changes are taking place. Before 1989, little consideration was given to discrimination in Eastern Europe, but now people are becoming increasingly aware of the problem. The passive attitude of the authorities began to change in the mid-1990s and problems were acknowledged. Red tape has been replaced by action programmes to combat discrimination and social exclusion. The EU has been fully involved in this, but in doing so has created expectations among the authorities and the general public. It has thus become jointly responsible and must now provide much more than technical advice. More money is needed, as is greater co-ordination and better exchanges of information in Member States and in Brussels. The Roma see the EU as the organisation that is finally going to push through improvements and we must not let them down. Before the EU is enlarged and millions of new EU citizens of Roma origin are brought in, the EU needs to assign a specific Commissioner responsible for co-ordinating current and future EU Roma policy.

The Roma can no longer be classified as a marginal minority. They will undoubtedly seize the opportunities offered by EU membership to sound alarm bells even more loudly in Brussels together with other Roma already in the EU who share the same plight. And in view of the importance of their social and political involvement, as we have repeatedly stressed, we can only welcome this development. Account will have to be taken of the special nature of this European minority, which is a very striking expression of the enormous and much-vaunted cultural diversity of Europe. The Roma have long and harsh experiences of a hostile outside world. They are still surrounded by a high, invisible wall. Tearing this down will require much more work.

Postscript

This paper, which has been produced in various versions, was inspired by the activities of the Party of European Socialists and the European Forum for Democracy and Solidarity with the objective of putting the Roma issue higher on the agenda. These activities were carried out on the ground and included many visits to Roma settlements. Our partners in Central and Eastern Europe have been encouraged to practice what we preach together. Although there are no immediate answers to all the problems that we have identified, there has been new and positive activity to start to improve the situation. But socialists and social democrats will have to keep up the pressure at a local, national and European level. Our work in this area will continue.

86 Strengthening the PES

- European Party financing: questions and answers Ruairi Quinn/Antony Beumer, Brussels, April 2004

- Regulation of the European Parliament and of the Council governing political parties qt European level and the rules regarding their funding Brussels, November 2003

- Overview of the implementation of the Berlin resolution Brussels, April 2004

tabled by PES Treasurer, Ruairi Quinn and Secretary General, Antony Beumer European party financing: questions and answers

Introduction

The adoption of the European party statute in September 2003 ended a long discussion on a transparent new scheme for funding European parties. The PES and its parliamentary group welcomed the outcome as a balanced support scheme based on high standards of transparency and accountability.

The agreement on the party statute is a big success for all those who strive for transparency and accountability of the EU institutions. However practice has shown that misinformation and misunderstanding can lead to negative media coverage.

1. Why do we need European parties such as the PES?

European parties give an extra dimension to EU democracy by making it possible for political families to organise at EU level.

A political family like ours needs a platform where PES government members, commissioners, party representatives and national and Euro MPs can meet to develop a common strategy . This is the core task of the PES.

The PES website – www.pes.org – details our party's activities. We produce a platform for the EP elections, organise summits of party leaders before EU Council meetings, bring together ministers, spokespersons, commissioners and MPs on priority themes. These include globalisation, security and defence, migration and employment.

The challenge of the PES project is to see that European socialists and social democrats increasingly share sovereignty on EU matters. In recent years the PES, the PES Group and national PES parties and government have successfully pushed forward EU employment and environmental policy. We are currently involved in major projects such as seeking political responses to globalisation and strengthening dialogue with US democrats.

2. Are these European parties real parties?

European parties exist to meet new needs that EU governments recognised in the Maastricht Treaty. These parties do not replicate national parties at European level because they serve a quite different purpose.

We expect European parties to grow in influence but they will remain relatively small structures and will not replace national parties. National parties will continue to be the principal means by which policy is formulated and articulated, with the PES and its counterparts taking a growing role in EU matters.

The PES was founded in 1992 in The Hague and currently has a staff of 13 people based in Brussels. It is funded by membership subscriptions from its member organisations - until July 2004 staff and office accommodation are provided by the PES parliamentary group.

88 As from July 20th 2004 onwards the PES and the other European parties will receive a yearly subsidy which we expect will enable the PES to more or less continue on the basis of the present organisation and budget.

3. Why do European parties deserve EU financial support?

In most EU countries, political parties have relatively small budgets and are unable to meet the extra costs of working beyond national boundaries and in several languages. Under the statute, the EU would provide 75 per cent of the finance needed and the rest would come from the parties' own funds.

Strengthening of EU parties is of direct interest to the EU institutions. The parties help to bring the EU closer to its citizens. Direct elections to the European Parliament are a major challenge that need the involvement of the whole political infrastructure alongside the Euro MPs.

4. Why did we need a European party statute?

We needed this statute because funding for European political parties must be fair and above-board. Up to now, political groups in the European Parliament have helped to get their respective parties off the ground. All five European parties were born in the European Parliament and this was a logical way to begin.

At the same time, we fully agree with the EU court of auditors' assessment in 2001 that European party organisations should not operate from within the European Parliament. The adoption of the statute in September 2003 means that EP groups will sever their organisational and financial links with parties from July 2004.

5. What is in the European party statute ?

The European Parliament and Council agreed in September 2003 on a European Party statute with the following content:

Transparency All income and expenses must be made public under detailed rules on transparency and accountability.

Sponsorship Sponsorship is allowed up to €12,000 per donor per year. State firms and EP political groups are banned from sponsoring parties. The PES currently has no sponsors.

Timing The statute's financial provisions take effect in July 2004.

Division of financial support Eighty-five per cent of the budget will be shared in proportion to the number of MEPs from the respective European parties. Fifteen per cent will be divided equally between all recognised parties. Democracy check European parties that disrespect basic fundamental rights and freedoms as laid down in the Treaty, can be denied support under a procedure detailed in the statute. These rules open the possibility, for example, of progressive democratic forces challenging EU support for parties of the extreme right.

Threshold for financing In order to receive EU funding European parties must have at least one elected representative (regional, national or European) in a quarter of the member states. This threshold allows small parties to qualify whilst preventing insignificant structures from receiving funding.

6. Who opposed the party statute?

In the European Parliament and Council, the vast majority of political families backed the statute. Opposition came from two corners: eurosceptic forces, being opposed to further European integration; and the extreme right, which has not (yet) created its own European party.

Within Council twelve governments adopted the party statute. Three governments voted against: Italy (because of the opposition of Umberto Bossi of the Lega Nord), Austria (because of the opposition of Jörg Haider, of the FPÔ) and Denmark (because its government and parliament oppose EU support for European parties)

7. How much money will be available in 2004?

The Commission has proposed a total of €8.4m a year for European parties.

A decision on the budget for the second half of 2004 is likely to be taken by the European Parliament on 3 Mai 2004.

In order to ensure full respect for the party statute, the PES and its EP group have insisted on agreement on a detailed code of conduct. As well as ending the political groups' funding and staffing of European parties, this specifies conditions in which European parties can use EP meeting facilities. In March 2004 such a code has been agreed upon.

The Commission proposal of €8.4m a year will broadly enable the five existing European parties (EPP,PES, ELDR , greens and regionalists) to continue their work. Two or three new parties might apply for funding.

8 . Where will the PES go in July 2004?

PES treasurer Ruairi Quinn has proposed to the Presidency the rental or lease of a Brussels House of Social Democracy from July 2004 onwards. The PES hopes to share the House with Ecosy (PES youth), PES women, IUSY (SI youth), the international Falcon movement, the European Forum for Democracy and Solidarity and other progressive organisations and foundations. The building will be called the "Anna Lindh House".

90 Furthermore the PES has offered the London based Socialist International to join the Brussels facility. The PES parties, as main financial contributors to the SI, have stressed the "economy of scale effects in a situation where the two autonomous organisations could operate from the same house.

The SI has not yet decided whether to accept the offer. An effort will have to be made to make clear to Socialists and Social Democrats all over the world that pooling resources and facilities in a common house with in-house meeting facilities is in the interest of our world-wide political family. 92

96 Strengthening the Party of European Socialists

The 5th PES Congress,

Recognises that the Party of European Socialists has gained ground over recent years, especially in its role as a co-ordinating mechanism and discussion platform for Socialists and Social Democrats in the European Institutions.

Notes, however, that this development has not coincided with a more public role of the PES, nor with a greater involvement of the individual members of PES member parties.

Considers that a number of steps have to be taken to integrate the associate parties from the enlargement countries, to promote an EU statute for European political parties, to strengthen the profile of the PES within the national parties and to reinforce the democratic basis of the PES.

These steps are:

Co-operation with and integration of the PES parties from EU accession countries Stresses the need for the PES to prepare for the full membership of those associate parties from the EU accession countries by allowing representatives of the associate parties to attend all PES bodies; Congress, Council, Leaders meetings (at least once a year); Presidency (at least twice a year); and coordination team.

Stresses the fact that within a few years the relative weight of Social Democracy within the European Union will depend on over 30 member parties instead of the current 20. The PES and its member parties are urged to give full support to the enlargement parties in their forthcoming national election campaigns

Invites the parties concerned, in line with PES policy during the previous enlargement of the EU, to submit a request for full membership directly after the negotiations between their country and the European Commission have been successfully concluded. As a consequence the parties will become full members of the PES before their countries will officially become EU Member States.

Towards an EU Statute for European political parties Urges the PES, its Parliamentary Group and its representatives in the European Council to work for the adoption of a regulation for European parties as foreseen in Article 191 of the Treaties as amended in Nice last year.

Stresses the need for European parties to have a status compatible with national law and provisions, and to enable them to organisationally and financially separate themselves from their respective political Groups in the European Parliament

Demands that the party statute assures the highest standards of transparency and accountability and stresses, therefore, the need for regulation of the acceptance of gifts and sponsorship and regulation of the future organisational and financial relations between European parties and their respective political groups in the European Parliament. Highlights the need for the European party statute to incorporate the condition for the respect of fundamental democratic values as well as a mechanism for the screening, evaluation and imposition of sanctions in such cases where these values are breached.

Recognises that the PES, on the basis of the work plan submitted to the Congress and within the context of a European party statute, will require an increase in contributions from the member party over the next few years.

Invites the PES Presidency to urgently elaborate a plan for the organisational and financial basis of the PES and discuss this with the leadership of the PES parties and the Parliamentary Group.

Strengthening the PES within the national parties PES in party statutes: Urges those PES member parties who have not yet done so, to incorporate a reference to the PES in their party statutes referring to the co-operation among European Social Democrats and Socialists in general and their co-ordination of EU policy in particular.

PES and its logo on material and web sites: Recommends that PES member parties refer to the PES and use its logo on basic material such as party membership cards and web sites.

A mandate for PES Congress: notes that a majority of PES parties have formalised the selection procedure for PES Congress delegates, which has had a positive impact on the organisation, preparation and democratic mandate of the PES Berlin Congress.

Urges PES parties to further strengthen the mandate of their Congress delegates by formally electing or nominating them by party organs.

Proposes to the future PES Presidency to look into the possibility of having permanent party delegations to the PES Congress.

Serving individual members: Urges the PES, its Parliamentary Group and the national parties to pool their resources and work towards an integrated web site structure which will help individual party members and the wider public in their search for information and an exchange of views on European affairs.

Urges all PES parties to follow the example of some of their sister parties and to offer members of other PES parties living in their country an automatic, free and additional party membership. By the time of the next PES Congress a link between European Social Democrats and Socialists living in another European country and the PES party of their host country should be established. This would promote their participation in local elections in the Member States they live in as well as in elections to the European Parliament in the country of their choice.

Preparing for the 2004 elections to the European Parliament: (see also PES activity plan 2001-2003/2004) urges the PES and its member parties to make a better use of the comparative advantage of being part of the biggest and most cohesive European political family in national and European election campaigns.

98 Stresses the need to start, at an early stage, with the elaboration of a PES plan for the preparation of the elections to the European Parliament of 2004 with the aim of regaining the position of the largest political group in the European Parliament, taking into consideration the renewal of the European Commission in the same year. 100 PES Working group paper on

Sustainable Development

tabled by SAP Leader and Prime Minister, Göran Persson “As European socialists we must embrace the possibilities of the future. Guided by our social democratic values and vision for sustainable development we shall show political leadership.

102 Our ideas stretch beyond the future of Europe, they also include global responsibility. We as social democrats need to deliver a clear message for the World Summit in Johannesburg. We can make a difference in Europe but also for Europe as driving force for global solidarity.

We hope this report will be a fruitful contribution to the upcoming summit in Barcelona as well as to the Johannesburg preparations.”

Göran Persson, Swedish Prime Minister & Leader, SAP Chairman of PES Working Group on Sustainable Development

1. Social Democracy – bearer of a modern social vision for sustainable development

”Poverty is the greatest polluter and the struggle against poverty is also a struggle for a better environment.” These were the words of the late Indira Gandhi at the 1972 UN Environment Conference in Stockholm. Now, thirty years on, the struggle for global justice is more important than ever before. International capital streams pit countries against each other and the prevailing short-term perspective takes neither social nor environmental conditions into consideration. At the same time, we can say that the prosperity of the industrialised countries is by large based on an over-consumption of the world’s finite natural resources. Global threats such as climate change or extreme poverty point to the need for change and the fact that the industrialised countries have a moral responsibility to play a leading role in driving through such change. As European Social Democrats, we are prepared to accept this responsibility.

We have a proud tradition. With clear goals and the vision of the welfare society, we have pursued an active policy for change. Successes achieved have not led us to rest on our laurels and no challenge is considered insurmountable. Our conviction that politics is the driver of change is fundamental to our ability to face up to long-term challenges.

As European Social Democrats, we are the bearers of a modern social vision for sustainable development through the recognition of fundamental individual rights. Our principal aim is to transform our present society into one characterised both by solidarity between generations and solidarity between countries. A society in which economic, social and ecological goals establish a new equilibrium where all people’s intrinsic resources are utilised and preserved.

The vision of sustainable development is a development of a Social Democratic model characterised by the goals of full and fair employment, welfare for all, international solidarity and a good living environment. In the new vision of the future, the environmental perspective, along with the economic and social angle, is fundamental to a society based on solidarity and justice – a society in which the citizens believe in the future and actively participate in the ongoing development.

Sustainable development, like social democracy, is a value-oriented vision based on democracy and equality regardless of gender, race or religion aiming at an equitable distribution of life opportunities. The ongoing process of globalisation requires the development of a global civil society based on fundamental rights and responsibilities. Inequalities increase between countries as well as within Europe. That is why we, as European Social Democrats, consider recognition and further development of the Charter of Fundamental Rights as an important step.

The concept of One World implies a principle of joint, indivisible security; a global security that extends beyond the protection of borders. All people have a right to a secure existence and all states have an obligation to protect those rights. Based on these values we have to build our global platform.

Given the present situation, action for sustainable development is all the more urgent so that we can establish security for all. We must strive for a political coalition, with the aim of ensuring sustainable livelihoods for all peoples, nations and cultures of the world. It is fundamental that we promote integration instead of exclusion from society in order to remove the underlying causes of violence.

Perhaps the most important issue regarding sustainable development in Europe in the short term is the approaching enlargement of the Union. The implementation of EU policies and legislation in central and Eastern Europe will require rapid technological development to upgrade environmental protection, social welfare and economic growth. Technological aid and building up capacity to cope with this transition are issues of the highest priority. The dialogue with the candidate countries has to be strengthened in order to address better the specific challenges within an enlarged union. These countries should be included in the synthesis report due in early spring 2003 and the sustainable development strategy has to be considered when reviewing the accession funds. Sustainable development shall also have an important role in the further development of the EU’s Barcelona process and Northern Dimension policy. Furthermore, Europe has a particular responsibility towards the Mediterranean zone and especially towards the countries of the South through the agreements between the EU and ACP countries.

A European strategy for sustainable development should be seen as a tool in the struggle against inequalities. We must promote a fair distribution of the positive opportunities created by the current process of globalisation. Fundamental to this strategy is the struggle against poverty both in Europe and throughout the rest of the world. A European strategy for sustainable development must send a clear-cut message to the World Summit on Sustainable development enabling developed and developing countries to reach a New Global Deal, linking issues between the pillars of sustainable development.

This report outlines a strategy for sustainable development containing elements of both internal and external European policies complementing developed strategies for employment and social cohesion. The strategy will have to be elaborated further and other elements added. We, the parties of the PES, commit ourselves to continue this work and together with other bodies and partner such as the Trade Unions implement a just and effective strategy.

2. Sustainable development – investment to promote welfare in the future

The sustainability perspective is a necessity if coming generations are to be able to realise the Social Democratic vision of justice and equality in solidarity. The future resource base must be wide enough to promote an equal and just society. In this respect special attention has to be focused on conservation of biodiversity alongside resource-efficiency.

104 The long-term perspective requires us to act now in order to break unsustainable trends.

Legislation, public investment, dialogue with civil society and the business sector as well as local participation are driving forces behind the transition to a sustainable society. Our efforts must emanate from and be deeply rooted in the everyday lives of our citizens. Investments in new infrastructure, technology and social welfare that do not bring with them increased environmental load will improve the quality of life for Europe’s citizens in the long term - a development that will strengthen the competitiveness of the business sector, stimulate employment and bring economic and social stability. The regional perspective should be considered and further explored in the context of sustainable development. In order to enhance social cohesion job creation must be promoted in less developed regions. In this respect access to services of general interest are fundamental.

European Social Democracy wishes to pursue a growth policy, which unites the economic, social and environmental dimensions. The role of environmental technology in sustainable economic growth and increased employment must be utilised and further developed.

The conditions for small enterprises represent an important basis for the dynamic development we wish to create. It is often in small companies where new technology is developed. Sufficient scope for starting and running companies and successfully developing ideas is an important condition for creating ecologically sustainable growth.

It is also important to be able to transform ongoing research in these areas into finished products much more quickly. Closer cooperation is required between universities, the research community and business. In addition, public investment programs can serve as a driving and strengthening force.

Our overriding objective is to create a society based on economic, social and ecological sustainability within one generation. Europe is to be the most competitive and dynamic knowledge-based society in the world, providing scope for sustainable economic growth with more and better jobs, a higher degree of social cohesion and with ecological sustainability as the objective within one generation.

Together, we will work out a concrete and progressive strategy for sustainable development based on solidarity. A strategy that departs from every citizen’s right to employment, good health, social security, decent accommodation and a good quality of life. For us as European Social Democrats, such a strategy is an important means of implementing our social vision.

Overriding objectives

Together, within the PES and the EU, we have formulated the overriding objectives that will steer our sustainable development efforts.

Stable economic development with good growth, full employment, low inflation and strong public finances with a decreasing burden of debt. Public finances will break even or show a surplus. Employment levels will rise to 70 per cent in the EU and to 60 per cent for women by 2010.

A high level of public health will be secured when drafting and implementing community policies. A high level of ambition will be set to prevent social exclusion.

The implementation of the 6th Environmental Action Programme will facilitate economic growth decoupling from environmental impact. Ecologically sustainable development will be achieved within one generation. 3. Strategies and implementation

The benefits of a holistic approach

The fundamental change and challenge that European Social Democracy faces is to develop a policy that leads to collaboration between the three dimensions of sustainable development.

Every political decision must be based on a holistic analysis that reflects the effects of such a decision on all three policy areas. By doing this, we can maximise the benefits and use resources efficiently. Investment in environmental technology produces such synergy effects as it simultaneously improves health and human well being, reduces healthcare costs, curtails absence from work due to illness as well as creates new jobs.

Or, on a more basic level, we should promote economic growth that provides scope for more people to be active on the labour market, thereby reducing social exclusion. Less social exclusion in turn lays the foundation for active social participation, safeguarding the common good for the future. Sustainable economic growth based on investment in technology which leads to less consumption of resources, at the same time as allowing a social and environmental level of protection to be established, provides the driving-force in the positive spiral created by a strategy for sustainable development.

Monitoring and reporting are particularly important in order to consolidate the three dimensions. Through this, considered assessments of necessary measures can be carried out. At the summit in Göteborg, the European Council decided to provide the necessary political guidance to promote sustainable development at its annual spring meetings. The environmental component complements the Union’s commitment to economic and social renewal. Through this process of further efforts to implement the strategy, a common platform for policy development and community-wide measures has been created.

The PES believes that effective implementation of the sustainable development strategy requires new institutional tools. We suggest a preparatory group on sustainable development that can add value to the individual sectoral Councils by taking a crosscutting view on priority topics and that can operate in a transparent way.

A joint and co-ordinated implementation process will strengthen the resolve of every individual member state including the accession countries. This applies not least to non-harmonised areas where dependence on the world around has previously constituted a decisive barrier to national measures aimed at promoting sustainable development.

Co-operation – one of the keys to success

Implementing a sustainable development policy requires efforts on the local, regional, national, EU and global levels. All appropriate measures demand both deep-rooted support from the people and their active participation.

106 To support active citizen participation in social change, efforts in the field of education and training are crucial. Changes must be effected so that sustainable development is reflected in mainstream teaching. A high level of education for all citizens is also of premium importance to the transition to a more modern knowledge-based economy. This will contribute to greater employment and enable structural and regional changes.

The work and policy development done by the ETUC indicates the commitment of the trade unions to take part in developing the strategy of sustainable development. The role of the social partners in policy development should be encouraged.

Extensive efforts are also needed in the areas of research and technological development. The EU’s research policy must focus not only on the development of new technology as a support for sustainable development but also on the development of decision-aiding tools as well as evaluation and monitoring methods. We, the PES, believe that the EU research program should be guided by the sustainable development strategy, support the implementation of the 6th Environment Program and help develop the Cardiff process further.

A systems approach should be established where public and private interests can cooperate. Investments in new solutions and infrastructure require old spheres of responsibility to be reconciled and joint plans to be established.

Local action and participation

The global challenge has to be anchored in people’s daily lives. With the perspective of basic individual rights and obligations the necessity for action and changed lifestyle becomes obvious.

Local and regional authorities, as the level of governance closest to people’s daily social, economic and environmental concerns have a critical role to play, both in supporting citizens’ commitments resulting from sustainable development, as well as cross-sectoral partnerships involving the private sector. The work with local Agenda 21 has to be continued and improved based on an evaluation of good and bad practice, and co-operation in regions involving applicant countries developed. Special attention should be given to the ongoing work involving countries in the Mediterranean zone and around the Baltic Sea.

In order to strengthen the local and national perspective in the global work, civil society should be encouraged to actively take part.

4. National and European action plans for sustainable development

The European Social Democrats wish to develop an action plan to help build the new, modern welfare society where the citizens and human development are the focal point. We will formulate time-bound targets for those sectors that are particularly important for sustainable development and an account will be given of the measures taken and investments made. Necessary policy changes concerning subsidies, investment support, economic instruments and pricing are all essential components of a Social Democratic programme for sustainable development. The overall aim of sustainable development has to be reflected among public spending priorities. An overriding aim is to de-couple economic growth and increased environmental impact. This requires changes to present production and consumption patterns. Our policy will stimulate new resource-efficient technology - and with it produce environmental gains, economic growth and new jobs. Product and production standards have to be developed together with the implementation of an integrated product policy based on a life-cycle perspective.

As European Social Democrats, we want the EU to be the most resource- and energy-efficient region in the world and a leading partner for technological transfer to developing countries.

In global terms, environmental technology and environment-driven growth together represent one of the fastest-growing markets. Small and medium-sized enterprises can be supported on the export market through national networks that work as ”shop windows” and marketing managers for environmental technology. Similar efforts are also important from an employment perspective.

The PES believes that Europe must continue to be at the forefront of technical innovation and make full use of its potential for growth and job creation. The Union should promote benchmarking and Best Available Technology in different sectors. Environment and sustainable development should be integrated into harmonised standards and technical specifications. An action program should be developed at European level in order to identify and remove obstacles for the promotion of clean and resource efficient technologies.

A) Important instruments

Sustainability impact assessment

All decisions should reflect the overall vision of sustainable development. In order to ensure policy coherence new instruments have to be developed. In addition to indicators and monitoring, sustainable impact assessments are essential and must be implemented. Such assessments should cover the potential economic, social and environmental consequences of all major policy proposals.

Sector integration

One important measure following the revision of the Amsterdam Treaty was the process of integrating environmental considerations into sector policies as decided in Cardiff. This process has to be further strengthened and reviewed with regards to the decisions taken in Gothenburg and Barcelona.

Indicators – for credibility and citizen involvement

We must give the citizens and the entire civil society the chance to evaluate our policies. It is equally essential for us as a political power to be able to see that measures we have adopted produce the desired results. We would therefore like to see a number of indicators developed within the EU that are also broken down sector by sector and onto the national level. As a whole, the indicators should relate economic development, social prosperity and environmental impact. These indicators should also include human development indicators as already used within the UN. The system of indicators must cover all areas mentioned in the sustainable strategy. In the preparations for the

108 Barcelona Summit six environmental indicators has been proposed. We, the PES, believe that this process has to continue, especially the development of indicators for the area of public health, in particular chemicals, and of sustainable natural resource management, in particular bio-diversity.

Economic instruments – an instrument of sustainable development

For us as Social Democrats, economic instruments and taxes are fundamentally an important tool in our quest for a fair distribution of wealth. In recent years, charges and taxes have also, as a complement, gained in importance to encourage the right kind of action from the business sector and the citizens. This is not only true in the environmental field but also regarding, for example, regional development.

Taxes and charges can, if used correctly, stimulate a development towards better resource-efficiency and less environmentally harmful emissions. By increasing the pressure for change at such a rate that allows the business sector to continuously adapt, taxation policy can help give the European production system a more ecologically sensible structure at the same time as our aim of fair distribution is protected. The possibility for member states to use decreased indirect taxation to promote sustainability should be supported.

It is important that the sectors and various industrial operations pay the true costs of society. Pricing products so that the real social and environmental costs are reflected provides an incentive for the consumer and producer when they are deciding which goods and services are to be produced or purchased.

Individual countries cannot have taxes that differ radically from the world around us. Current efforts within the EU and the OECD to combat unfair tax competition are important if we are to discourage countries from attracting tax income by offering tax privileges. We as European Social Democrats must drive forward the work to draw up minimum tax rules, especially regarding the taxation of energy and capital, and endeavour to increase the exchange of information between tax authorities in different countries.

The PES believes that national tax systems should, as a compliment to the aim of fair distribution of wealth, serve as a catalyst for change towards sustainable development. A reform is needed based on introduction of environment related taxes – minimum levels should be recommended with priority given to carbon dioxide tax.

The financial market can support environmentally sound investment by new policy instruments. These possibilities have to be explored further and voluntary agreements encouraged.

Increased taxation on environmentally harmful operations and reduced taxation on labour

The concept of green tax exchange couples environment policy to employment policy. Regarding the environment, tax exchange is about helping to create pressure for change – change towards an ecologically sustainable society. Regarding employment, it is about providing the right fiscal conditions for work. The transition of society to ecological sustainability and reinforcing the principle of full and fair employment are decisive components in our efforts to, for example, prepare society for the ageing population of the future.

The PES believes that implementing green tax exchange on the national level is important for sustainable development. We should strive for comparable levels within the field of taxation as far as possible.

Public procurement

An important driving-force for technical and environmental development is the demand created by society’s institutions when they procure goods and services. Public procurement within the EU is estimated at Euro 720 billion per year. Social and environmental requirements must play a more prominent role in this framework. The point of departure is that the negative impact of a product on human health and the environment should be minimised throughout its entire lifecycle. Such a change will create an instrument in support of sustainable development which can be much more powerful than any direct support or subsidy. Market-based instruments can be more cost-effective and also send an important signal to companies who voluntarily ”green” their operations.

Public bodies must also take the social dimension into consideration when they are procuring goods and services. It is reasonable to place requirements that guarantee respect of accepted labour and employment conditions.

The PES would therefore like to see the development of a public procurement policy which allows for a lifecycle perspective to be taken of a product and for social and environmental requirements to be placed on it.

B) Infrastructure – transport, energy, building

The infrastructure must satisfy citizens elementary needs and should be developed in such a way that access is guaranteed to services of general interests and competitiveness of the business sector and good working conditions promoted. In addition, it should safeguard a high level of good health as well as contribute to both regional and ecologically sustainable development.

The transition to ecologically sustainable development requires changes to society’s mainstay infrastructure. Goals and instruments should be constantly developed within each sector in order to stimulate investment in new green technology.

Changes to the infrastructure are crucial to the Community’s and each individual member state’s chances of being able to fulfil their commitments under the Kyoto Protocol. We must break our dependence on fossil fuels.

As European Social Democrats, we want to lay the foundations of a new sustainable infrastructure that will help create a resource-efficient welfare system.

Transport policy is currently undergoing change – the health and environmental perspective is being developed in relation to social and economic aspects. The most important issues to come to grips with are climate change, acidification, eutrophication, air quality and noise. A

110 sector strategy should stimulate the introduction of new technology (engines and fuels), lead to more efficient utilisation of capacity, increase coordination between different modes of transport and increase the proportion of rail transportation. The environmental impact of air traffic should receive special attention. We must de-couple economic growth from increased transport volumes.

Planning policy needs to be re-examined in order to establish effective and sustainable commuting, both within cities and between cities. Furthermore, new research has to be focused on increasing problems related to transport such as noise and electromagnetic radiation in order to make future action possible.

Example – decisions taken at the Göteborg summit:

The European council invites the European Parliament and the Council to adopt by 2003 revised guidelines for trans-European transport networks on the basis of a forthcoming Commission proposal, with a view to giving priority, where appropriate, to infrastructure investment for public transport and for railways, inland waterways, short sea shipping, intermodal operations and effective interconnection;

The PES believes that:

 Large-scale investments have to be made in infrastructure so that EU can become a model for sustainable development.  It is necessary to bring about a shift in transport use from road to rail, water and public passenger transport. The share of CO2 emissions, at the EU-level, from the transport sector should in 2010 be no greater than in 1998.  All community planning should give an account of the transport requirements and promote public transport.  Through co-ordinated investment, Europe should create the world’s most efficient rail network. Development of the Trans-European networks is an important step that requires improvement of competitiveness and measures to significantly reduce technical and other barriers to cross-border rail transport within the Community. This includes harmonised security rules, education of drivers and tariffs.  By 2005 the Commission should have developed a framework for transport charges in order to establish a fair an efficient pricing regime, which internalise external social and environmental costs.  We should introduce an international aviation fuel tax to reflect the environmental costs of flying, if this does not succeed alternative actions within the EU should be considered.  Tax instruments for road transport of heavy goods, such as a kilometre tax, should be implemented by member states.  Alternative fuels, including for example biofuels and hydrogen fuel cells, should account for at least 20% of fuel consumption of cars and trucks by 2020 at EU level. A system of green certificates, as for renewable energy, should be considered for alternative fuels.  The wording of the mineral oil directive should be reviewed with the aim of achieving established targets for increased proportions of renewable fuels.

Energy policy is an important factor affecting the competitiveness of the business sector and social development. At the same time, the energy production base must change if environmental objectives pertaining, for example, to carbon dioxide emissions are to be attained. Efforts to expand renewable energy sources should be combined with efforts to bring about more efficient energy use.

Renewable energy incentives should be combined with strategies to phase out fossil fuels in energy production An important starting-point in this context is that prices must reflect the real costs and subsidies to fossil fuel energy production must be reformed with a view to progressive phasing out.

The market for renewable energy must be strengthened. Flexible and market-based instruments that work on a deregulated and integrated market must be developed as a complement to other policy mechanisms.

Example – decisions taken at the Göteborg summit:

The European Council furthermore reaffirms its determination to meet the indicative target for the contribution of electricity produced from renewable energy sources to gross electricity consumption by 2010 of 22 percent at Community level as set out in the Directive on Renewable Energy;

The PES believes that:

 Europe should lead the technical development of renewable energy production.  In perspective of the established indicator on energy consumption related to GDP we should consider formulating a EU-wide target for energy-efficiency.  Energy labelling has to be further developed in order to promote energy efficiency.  The adoption of the energy products tax directive including minimum tax rates is essential.  Reform of subsidies to fossil fuel production should be implemented with a view to progressive phasing out.

Housing and buildings in their design and location represent an important part of society’s infrastructure. Planning and design partly dictate what scope there is for good natural resource management concerning for example land and water. An active housing policy is also an important instrument of social development and can combat segregation by supporting the right to decent accommodation and by encouraging social diversity.

The design of housing and buildings is closely connected with energy consumption, either for cooling or heating. It is important to introduce environment friendly building material and environmental certification of buildings including recommended energy consumption based on best-

112 available technology. Traceability of building material is fundamental for their recycling. Because of the health risks related to asbestos, lead, radon etc financial and regulatory instruments should be used in order to deal with these problems.

Water consumption has to be brought under control using appropriate regulations and public awareness campaigns.

Our internal environment is dependent on the building materials used and the design of the ventilation system. In environments where there are children, such as schools, these issues should receive particular attention as they have a direct impact on health. The function of ventilation systems should be included in building regulations.

The PES believes that:

 The planning of housing and other buildings should depart from sustainable development, focussing particularly on resource use, health and social development.  National management mechanisms for limited energy consumption in housing and other buildings should be developed including tighter minimum standards and labelling requirements in order to improve energy efficiency.

C) Production based on natural resources – agriculture and fisheries

The prudent use of natural resources is a fundamental prerequisite of sustainable development and also significant for sustained regional development. Along with climate change, the threat to the Earth’s bio- diversity and thereby to the wealth of all life on Earth, is one of the most serious global environmental threats.

In an economic perspective, the role of the biological production system becomes clear. The value of the ”services” which bio-diversity provides us with every year is estimated at 36 thousand billion dollars for the whole world. The world’s total economic production, on the other hand, amounts to 39 thousand billion dollars.

In relation to the use of natural resources water policy is of great importance. The use of water within the EU must gradually adapt to the mandate of the framework Directive on water. The core objective is to recover water and improve its quality. Member states are compelled to guarantee a more sustainable use of water, especially water destined to agriculture and farming. Therefore it is of great importance to promote technologies to obtain, treat and distribute water in order to prevent negative impact on the eco-systems. The fight against drought and desertification is also one of the priorities in this respect.

At the Göteborg summit, it was decided that ”the depletion of bio-diversity shall be stopped and that this objective should be achieved no later than by 2010”. The PES believes, therefore, that it is essential to develop indicators for measuring bio-diversity.

European agriculture is an important part of our society, history and culture. Agriculture helps to preserve historical values and regional balance. It is also significant for employment. As Social Democrats, we would also like to underscore the goal already established by agriculture sector - to guarantee a high level of food safety and competitive prices. Public demands for traceability and labelling must be met.

Transforming agriculture so that ecological aspects are also taken into consideration will make the sector a strong driving-force for sustainable development from a clear economic, social and ecological perspective. We, as European Social Democrats, would therefore like to see an amended Common Agricultural Policy (CAP) that encourages ecological concern and high food quality complemented with guidelines for preserving agriculture in less privileged areas. General subsidies should be redistributed in favour of financial incentives for organic farming, energy crops and the implementation of measures to promote bio-diversity. Such a change would make it easier for new Member States to be gradually phased in to the system and would also preserve small- scale agriculture in the candidate countries. Export subsidies should gradually be phased out in accordance with the agreement at Doha in order to ensure developing countries market access.

A long-term reform applied in a socially acceptable manner includes support to the production of collective commodities such as environmental services that can contribute to new or continued activity in agricultural enterprises. The reform of agricultural policy must also integrate policy for rural development with the aim of restructuring the agricultural sector and the creation of new jobs.

Example – decisions taken at the Göteborg summit:

The European Council agrees that the Common Agricultural Policy and its future development should, among its objectives, contribute to achieving sustainable development by increasing its emphasis on encouraging healthy, high quality products, environmentally sustainable production methods, including organic production, renewable raw materials and the protection of biodiversity;

The PES believes that:

 The purpose of the present overhaul of the EU’s CAP should be to effect change that would stimulate ecologically sustainable farming and preserve the cultural landscape. It should also include anti- eutrophication measures.  Ethical production methods and animal protection should also be stimulated.  The use and impact of pesticides and chemicals must be reduced. Close co-ordination of the new Community legislation on chemicals and regulations for pesticides has to be ensured.  The precautionary principle should be the guiding principle when using GMOs.  Agriculture’s contribution to both climate change and eutrophication should be reduced.

Fisheries, just like agriculture, are an important part of our society, history and culture. The sea is not only used for different types of activities such as fisheries and shipping but is also of major importance for people’s recreational opportunities. A sustainable production capacity in the sea is a direct prerequisite for the cultural-historical

114 environments that coastal areas constitute. Marine reserves should, in the same way as land areas, be established with the aim of protecting those areas that are especially valuable for bio-diversity.

The European fishing fleet must be reduced and new fishing equipment must be developed in order to reduce resource consumption. Measures need to be implement when the fisheries policy is overhauled in 2002. Subsidies should be substantially reduced in a socially acceptable manner in order to phase out over-capacity.

The sea’s production capacity is also affected by pollution caused for example by oil spills and nutrient leakage from agriculture. Powerful measures must be implemented to alleviate these problems.

Example – decisions taken at the Göteborg summit:

The European Council agrees: that the review of the Common Fisheries Policy in 2002 should, based on a broad political debate, address the The PESo bveelraievlels fthisat:hing pressure by adapting the EU fishing effort to the level The PEoSf b aevaillieveabs leth arte:sources, taking into account the social impact and the need to avoid over- fishing;  Economic subsidies within the fisheries sector must be gradually phased out in a socially acceptable manner.  The overhaul of the Community’s fisheries policy should aim to adjust the size of the fishing fleet to match the sea’s biological production capacity.  The fisheries policy must actively support the use of fishing equipment that reduces undesirable by-catches.

D) New sectors – IT – new development for sustainable development

IT should be used to achieve transition to the ecologically sustainable society. With new, resource-efficient technology and other technological advances, welfare and prosperity can be built up without depleting the environment.

It is also important, however, that changes in lifestyles and new infrastructures do not risk us getting locked into new unsustainable structures. An example of such a change is the recent increase in Internet shopping which, if incorrectly designed, can lead to increased transportation volumes. The social and environmental dimension must be considered as early as possible in the planning stage of IT applications.

Options that should be investigated further include; more efficient transport flows, less energy consumption in buildings, the design of a delivery system for Internet shopping and reduced transport requirements as a result of, for example, tele-working or video- and teleconferencing.

A strategy for expanding the IT infrastructure that takes environmental concerns into account will contribute to sustainable development in a regional policy perspective as well. Our objective is to facilitate access to new technology for everyone, especially in schools and universities etc. The PES would like to see more research into the IT sector’s role in sustainable development. The business sector should develop internal systems that encourage greater use of IT communications to reduce transportation requirements.

5. Global responsibility – a message to Johannesburg

The European Social Democrats want to adopt an action plan that guarantees all the positive opportunities provided by globalisation and which will lead to a fair global distribution and provide sufficient scope for achieving sustainable development. Globalisation has to work for sustainable development. This will mean modification to trade and development assistance policies that should be assessed based on their effects on sustainable development. Combating poverty and provide greater access to markets for the poorest countries are also important components of a Social Democratic programme for sustainable development.

Environmental problems are closely related to the injustices that are ingrained in today’s society, both within and between countries. The poor is often the first victim of environmental degradation and loss of natural resources. The richest five per cent of the world’s population is responsible for 86 per cent of the world’s total consumption whereas the poorest twenty per cent is responsible for just 1.3 per cent. This leads a doubled pressure being exerted on the global environment. The poor farmer is forced to use dirty fuel and chop down his last tree in order to survive whilst the over-consumption in the industrialised countries leads to resources being squandered, unnecessary emissions and the creation of vast amounts of waste. A substantial difference is however that the citizens in the developed countries have much greater freedom to choose their lifestyle – the poor have no such choice.

These global challenges require clear political leadership. As European Social Democrats, we are prepared to take our responsibility prior to the World Summit on Sustainable Development in Johannesburg in 2002. The overriding objectives are combating poverty, promoting sustainable livelihoods and sustainable consumption and production patterns.

The strong European commitment to the Kyoto Protocol should be followed by a rapid ratification. We, the PES, urge that all parties to the protocol complete their national ratification procedures in order to enable the protocol to enter into force before the World Summit on Sustainable Development.

The rapid globalization of the world economy has created a possibility for redistribution of investments between north and south. But it also exposes individual countries, and the world economy as a whole, to greater instability. The establishment of the European Monetary Union is one instrument developed to respond to this reality. For many developing countries, largely dependent on exporting raw material and primary products, the question of stability is a question of stable prices. The commodity regime has to reflect this particular problem. On a global level we have to establish a policy of sustainable prices that takes in to account the need for earnings stability, environmental costs and leads to a decrease in the pressure for extraction of raw materials in poor countries. The most important however is a transition to a more advanced and diversified economy based on self-sufficiency in food production and a developed production.

On a global level we have to generally strengthen the political instruments in order to ensure that the markets work in the interest of

116 the people. The concept of global security has to be broadened from the traditional focus on the security of states to include the security of people and the security of the planet. The rapid pace of globalization has surpassed the capacity of the system to adjust to new realities, i.e., a more independent, interlinked and integrated world. The goals of global security, eradication of poverty and the achievement of global justice as well as financial stability are today all intertwined.

All global and regional institutions, each responsible for particular aspects of economic and social life, have to improve their role in contributing to sustainable global development. Stronger political accountability, not least in securing consistent and coherent policies, is fundamental for change. We need an institutional framework for sustainable development that will provide for policy integration, knowledge-based decisions and participation.

We need a new platform for global environmental efforts. Our institutions must be strengthened and made more efficient. The international community must gather behind a joint strategy with concrete measures. Prior to Johannesburg, we must build a bridge of trust between north and south. In partnership with the civil society and the private sector, we shall endeavour to strike a ”New Global Deal”. Crucial to such an agreement are concrete steps regarding the financing issues, the transfer of technology, the dismantling of subsidies that constitute a barrier to trade and the status of the environmental dimension in relation to trade policy.

Regarding the financing issue, we, as Social Democrats, believe that concrete steps must be taken before Johannesburg in order for the EU countries to live up to the UN’s development cooperation objectives. A plan for a gradual increase should be drafted and implemented. Furthermore, we will strive for a progressive outcome of The World Conference on Financing for Development in Monterrey, Mexico, 18-22 March. Besides the institutional reform agenda we need a new balanced procedure to ensure more orderly workouts of unsustainable debts in order to assist debtor countries in maintaining social stability and to promote more equitable burden sharing.

A plan to achieve the development co-operation objectives should be completed with a plan to phase out subsidies within, for example, the agricultural and fisheries sector. Through these two strategies, the economic benefit of development financing will be maximised. Subsidies often lead to overuse of natural resources at the same time as poor countries are prevented from gaining access to the market.

The business sector can play an important role as a result of direct investments that are made in developing countries. By living up to fundamental social and environmental norms applied within the Union we contribute to sustainable development in these countries. Furthermore, closer co-operation should be established between development assistance bodies, the research community and the business sector with the aim of stimulating transfer of technology. As European Social Democrats, we want to contribute to such initiatives within the transport and energy sector.

Export credit policy can contribute positively to sustainable development and should be consistent with that objective. The recently adopted OECD proposal on common approaches also takes into account consultations with civil society. The implementation of this proposal will mean that all major exporting countries of the OECD will be applying environmental review mechanisms. This decision is a positive first step that requires revision of national policies for export credits within the Union.

An important prerequisite of sustainable development is that the financial markets are based on economic, social and ecological concerns. In this way, proper assessments can be made at an early stage and in certain cases regulated policies can be avoided. This approach should bear its mark on the regulatory framework for international trade, including the WTO. International social and environmental agreements and the WTO must be mutually supportive. The social and environmental perspective must be strengthened during the forthcoming round of trade negotiations. We, the PES, commit ourselves to the Doha development agenda.

The PES believes that:

 Global governance has to be strengthened in order to guarantee that globalisation works in the interest of the people. We need to ensure better coordination and mutual support between policies and actions of institutions like the UN, Bretton Woods and WTO.  A New Global Deal, restoring trust between north and south, has to be defined prior to the Johannesburg Summit.  The Johannesburg Summit agreement should include an Action Plan in order to implement Agenda 21 and the Millennium Declaration. It needs to focus on deliverables and the need for resources such as public and private financing, capacity building and transfer of technology.  The global environmental platform has to be strengthened by developing UNEP financially and institutionally, with a long-term view of a World Environment Organisation.  An open and fair trade regime has to be developed where trade agreements should be assessed based on how they affect sustainable development. Sustainable impact assessment should be implemented in the EU’s trade policy.  International conventions, especially those of the ILO, relating to health, labour rights and the environment must be respected in the WTO’s regulatory framework.  The precautionary principle should be applied within international bodies such as the WTO.  The EU’s agricultural and fisheries subsidies that can both be seen as ecologically unsustainable and as trade barriers should be modified and ultimately phased out in a socially acceptable manner.  People in developing countries should have full access to medicines at fair price levels in order to combat diseases such as HIV/AIDS, malaria and tuberculosis.  The EU should actively contribute to the fulfilment of the goal of halving world poverty by 2015.  The EU member states should fulfil the UN’s development assistance objective of 0.7 per cent of GDP and progress on this issue should be made before Johannesburg 2002.  The EU’s policy towards the world’s poorest countries should give them greater access to the market and allow their debt to be written off, especially those who are pursuing internal poverty alleviation policies.

118  The EU’s development assistance should contribute to strengthening the voice of the poor by investing in the civil society.  European companies’ investments should guarantee fundamental trade-union rights and protection of the environment and export credit policies apply to recommendations from the OECD regarding sustainable development.  The EU should develop a policy framework in order to promote exchange of clean and resource efficient technologies. This framework should include partnership with the private sector, reduction of trade barriers as mentioned in the Doha ministerial declaration, capacity building and a program for co-operation between universities focusing on exchange programs for students.

In conclusion, the political will to act is essential for the achievement of a more sustainable development. We need to find the right tools to implement the agreements and strengthen partnerships. We, the member parties of the PES, will strive to achieve this at the Barcelona and Johannesburg Summits. The PES and SI initiative to rebuild the Transatlantic Partnership

drafted by PES Secretariat

Brussels, April 2004

US-European relationships are at a low point. In very little time, the achievements of recent progressive leaders around the world in promoting international peace, democracy, the respect of human rights and unprecedented worldwide growth, while focussing increasingly on sustainability and social cohesion, have been eroded.

Once again Americans and Europeans are at a crossroads, questioning their relationship and the relevance of their alliances and ties. On both sides of the Atlantic we are still trying to come to terms with the fall- out of September 11th. We must make serious and urgent efforts to rebuild and renew our alliance. Divisions, be they inside Europe or between the US and Europe must not stand in the way of finding global answers to increasingly global challenges. The U.S. will play a leading role in the world, not least because of its economic and military capabilities but this must be based on negotiation, agreement and mutual understanding. Europe and other allies must play a joint role in a shared

120 leadership. A new culture of association, dialogue and co-operation must be put into place. There should be an end to unilateral decision making.

The Union which we are about to forge will be a welcoming partner on the world political and economic stage rather than an entity capable of challenging the United States which some political representatives want to make us believe.

The Party of European Social Democrats and the Socialist International with their organisations, permanent structures and co-ordination policy roles are in a unique position to lead the initiative from the European side and can play a key role in working with other progressive world leaders on this project.

To this end and to honour its commitment in the 2000 - 2004 workplan to develop a transatlantic dialogue, PES President Robin Cook and SI President Antonio Guterres have launched an initiative together with key progressive figures from the US to formulate progressive policy proposals aimed at building a new international structure capable of taking on the challenges of democratic world governance and developing sustainability. Renewal of the transatlantic relationship should be a priority.

Various preparatory visits by PES leaders in 2003 led to a decision to deepen links with US progressives by putting contacts and various individual initiatives on a firmer and more permanent basis. The organisations involved in preparing the co-ordinating groundwork are the PES and the Centre of American Progress, a newly created think- tank, led by former chief of staff of President Clinton, John Podesta.

The joint initiative agreed upon in December 2003, is called "Building Global Alliances for the 21st Century" and is supported by high-ranking progressive US senators, congressmen and political activists. The Alliance, although initiated by Leaders from the US and Europe is open to all progressives from other parts of the world. It was decided "that the Alliance should have a dual focus. In the short term, the Alliance will address specific global issues, yielding concrete progressive policy, that can be implemented quickly in cooperation with a network of global partners. In the long term, the Alliance will seek to improve global governance and build progressive international institutions for managing global problems".

The Alliance will also identify and reach out to progressive civil society, actors and networks.

Initially the Alliance will undertake two pilot projects, one on proliferation of weapons of mass destruction and the other on environmental policy including climate change energy policy and transboundary pollution with heavy metals. The pilot projects are each co-chaired by an American and a European. Future projects of the Alliance will address failed states, the fight against terrorism, regional security, trade policy, social policy and health care.

The Alliance held its first meeting in Stockholm on 14 April, hosted by Swedish Prime Minister Göran Persson. The Group of Americans and Europeans was joined by representatives from Brazil and South Africa. The meeting was considered a great success and a very promising start for further activities. Both pilot projects and the wider issues concerning international architecture were discussed in detail. First results are to be expected for early June 2004 and a further meeting is planned for the second half of this year.

122 Europe's new neighbours: A post-enlargement strategy for European foreign policy

tabled by PES Vice-Chairs, Rudolf Scharping and Jan Marinus Wiersma

I. Summary II. Europe's traditions III. EU Enlargement 2004 IV. Different neighbours - different strategies V. Russia and the new neighbours in the East VI. South East Europe VII. Turkey VIII. The Meditteranean region IX. Challenges facing EU policy X. PES Tasks

124 I. Summary

The long-term objective of making Europe stable and democratic is more important than establishing strict timetables for further EU enlargements. Apart from enlargement, there remain other ways to promote European values beyond the EU's borders. Both processes will help to avoid new divisions, either in Europe or in relation to the Mediterranean area.

We welcome the ten new members. The enlarged EU will have to invest in making the 1 May 2004 enlargement a success. It will not be an automatic process.

Bulgaria and Romania are not part of the present enlargement round. The EU has an obligation to try to finish the negotiations with these countries in good time to make their accession possible in 2007. This requires efforts from both sides.

Once Turkey complies with the Copenhagen political criteria, accession negotiations should start. A successful outcome of these negotiations will depend on whether Turkey continues to fulfil the political criteria and the economic conditions, and whether it is capable of implementing the acquis. In the lead up to the possible start of the accession negotiations with Turkey, the EU and Turkey should consider closer cooperation, in particular with regard to the wider Middle East region, the Mediterranean and concerning other issues of common interest in foreign and security policies.

Reinforcing and enhancing the stability of the southeast European region and an active role of the countries concerned are pre-conditions for considering future applications for membership. The long-term perspective for the countries of the Western Balkans clearly must be one of full European integration.

Enlargement is not the raison d’être of the EU and is not the only way to promote European values. Moreover, these further enlargements could potentially create tensions and political instability amongst current EU Member States and their citizens. We, as Social Democrats, should take these factors into account when considering our position on these future enlargements.

Belarus, Ukraine and Moldova need a regime change before they can embark upon a credible application for EU membership. The PES will take initiatives to promote democracy in these countries.

Relations with the Mediterranean should move beyond the current trade agreements. We should seek to identify areas of closer co-operation. The PES will step up its work on these questions and urge the EU institutions to promote a new and more coherent neighbourhood policy as part of Common Foreign and Security Policies of the Union.

II. Europe's traditions

The current round of enlargement raises the question of the European Union's approach to the states on its new borders. This calls for a debate on clarifying the traditions, possibilities and limits of European integration and formulating a flexible and comprehensive EU foreign policy towards neighbouring states. European integration is a success story. After two devastating world wars, dictatorships and monstrous crimes, the European Community, followed by the European Union, has enjoyed nearly 60 years of peace, democracy and prosperity.

In the course of enlargement, the Community has also integrated states that have turned their back on dictatorial regimes and has thereby helped establish democracy in these states in the long term. The 2004 round of enlargement is aimed at finally overcoming the division of the continent by the East-West conflict.

In the wake of all these successes, the question now arises of the Union's approach to its neighbours, some of which are new. Despite all these successes, we need to think consider carefully how far the Union can enlarge without overstretching itself and thus putting itself in a position in which it can no longer successfully carry out its tasks of safeguarding peace, democracy and prosperity.

The discussions about Turkey's possible membership of the EU have shown that applying only formal political, institutional and economic criteria are insufficient in face of the future enlargement of the Union. Otherwise the EU could in theory take in countries from every continent.

Nor do geographical and historical definitions of Europe offer adequate means of resolving the question of which states could be offered the prospect of EU membership. Europe is founded on the ideals of the European Enlightenment and humanism. The European community of values is based on human rights, democracy, social responsibility, equal opportunities and a balance between performance and solidarity, the individual and the state.

It is Europe's responsibility to safeguard these common values in a rapidly changing and increasingly interdependent world. To that end it must remember its core civilisation and make this the measure of the way it considers and evaluates its approach to its neighbours. In so doing, the European Union must take into account possible undesired reactions that could lead to destabilisation by not allowing other interested states to join.

At the same time, it is up to Europe to develop strategies and new forms of partnership for shaping its relations with neighbours that have no prospect of joining the Union even in the future. These partnerships must take as much account of Europe's own interests as of its neighbours' and build up and develop these relations to the advantage of both sides.

In a multipolar world, due account must also be taken of Europe's role as a global factor and the global responsibility this implies.2

III. EU enlargement 2004

In view of the forthcoming enlargement of the EU, the political actors must enhance its capacity for foreign policy action against the backdrop of its growing territorial, economic and demographic dimensions and the growing variety of perceptions.

2 See also 'Europe's global responsibility: seven theses on the future role of Europe', revised version, Berlin 2003.

126 The 2004 round of enlargement of 10 states and 75 million citizens could potentially increase the EU's international influence. However, this will not be automatic: to achieve this, the Union must become genuinely capable of action in foreign and security policy, as also in foreign trade and development policy, and if the EU states co-ordinate their action in international organisations.

Although the states that will be joining the Union in 2004 are well prepared for their journey towards the Community, they will have to continue to concentrate on their internal development.

In the new EU of 25 member states, it will not be easier for Europe to reach agreements in order to act in a global context. If Europe wants to increase its influence it must, therefore, make greater efforts in the field of foreign policy. With regards to its neighbours, the EU must aim to avoid any new division of the continent or any rigid demarcation between itself and the Islamic southern Mediterranean area. In this way it will also avoid provoking a new political confrontation against the background of a distinct prosperity gap and political differences.

IV. Different strategies for different neighbours

After the enlargement of 1 May 2004, the EU will have new neighbours in the East and South East and will have to consolidate its policy towards its Mediterranean neighbours. To this end, it will have to refine the instruments at its disposal and apply them in a flexible way. The EU will also have to establish different approaches to the different challenges from these states.

This applies to Europe's international political action as a whole, although it should be remembered that foreign policy begins on one's own doorstep. In line with its perception of itself, Europe does not regard its direct neighbours as competitors, let alone enemies. This too is evidence of the unique nature of European integration; unlike other associations of states, the EU defines itself not through an external opponent, but from within.

The fact that the Union always regards its neighbours as partners does not mean it can adopt the same policy towards every country. Its neighbours are too different, which means that cooperation must be based on different strategies. The first step towards defining these strategies is to establish Europe's interests vis-à-vis neighbouring states and regions. During this process, the EU will have to differentiate in both geographical and political terms. It must respect its own fundamental values, while also bearing in mind the specific significance for Europe of each neighbouring region.

The EU must, therefore, develop co-ordinated instruments that are appropriate to each given situation and set the corresponding priorities. Its approach must go beyond the rigid categorisation reflected in the association agreements and pre-accession arrangements. If Europe is not to overstretch itself, it must only offer the prospect of accession to very few states now. However, it should consider membership applications from its new eastern neighbours and call on these states to move towards guaranteeing the rule of law according to the Copenhagen criteria.

Despite the difficulties it experienced as a result of the Middle East conflict, the Barcelona process is an example of a sophisticated approach in that it focused on the cooperation between Europe and its neighbouring regions on concrete problems and possibilities.

The Commission's initial proposals (featuring in two communications on the relations with Europe's Southern and Eastern Neighbours and on the integration of the Western Balkans) should serve as a useful basis for further discussion. A prime concern is to clarify on what basis the EU can cooperate with its Eastern European and Mediterranean neighbours without either overstretching itself or creating a sharp dividing line.

The political decision-makers must bear in mind that the EU's future border regions already present a number of security risks. These risks do not currently pose a threat to the EU's security in military terms. One of the risks is the growing and constantly increasing pressure of migration in North Africa, as a result of the growing population. There are also problems of environmental protection and energy security resulting from the use of nuclear energy in Eastern Europe and the EU's dependence on oil and natural gas from the Caspian Sea area and from various regions in the Russian Federation.

V. Russia and the new neighbours in the East

The enlarged EU will have a new neighbouring region, consisting of Russia, the Western Commonwealth of Independent States and, indirectly, the Caucasus. These new neighbours differ significantly from the former Central and Eastern European neighbours. There still remain a great deal of work to do in defining the EU's policy with regard to these new neighbours. The EU's approach must encompass not only economic issues but also questions of human rights, democratisation and security.

The 2004 enlargement will give the EU a number of new neighbours in the East. Russia is the largest and most important new neighbour, to which the EU already attaches great importance prior to enlargement. This is both because of the Russian tradition of regarding Europe as a point of reference, especially in cultural matters, and because Russia is so important to Europe in terms of security policy and the economy.

In terms of security policy, Russia is closely linked to the European Nato partners, including the Central and Eastern European states, through the Nato-Russia Council. Russia has strong security policy interests in Eastern Europe, as well as in the Black Sea and the Caspian Sea areas. Russia also continues to play a strong role globally, as a permanent member of the Security Council, a nuclear power and, not least, due to its relations with India and China in the Asian region.

At the same time, the economic links between the EU and Russia are of great importance. The EU is Russia's main trade partner, in terms of both imports and exports. Oil products account for nearly half of the EU's imports from Russia, while other major imports consist almost exclusively of primary products, mainly precious and base metals. The EU has a growing balance of trade deficit with Russia, amounting to a total of 25.6 billion € in 2000, compared with 5.3 billion € in 1995.

Any European strategy towards Russia must take account of these factors. In addition, the fact that Russia will become an immediate neighbour will give rise to practical questions that need pragmatic solutions, such as the question of transit traffic between Kaliningrad and the Russian heartland.

128 The EU cannot avoid a critical dialogue with Russia about developments in its society nor can the EU ignore Russia's continuing strong influence in some of the former soviet republics.

The conflict in Chechnya still seems far from a peaceful solution. This conflict is costing human lives on both sides and further destabilising the Caucasus region. A peaceful solution must be found to this conflict, which has now lasted nearly a decade. The priority must be to find a compromise that will both guarantee the territorial integrity of the Russian Federation and allow the Chechnyan people to live in dignity, giving them the freedom to organise their own cultural and political life on a democratic basis. The EU, in association with the Council of Europe and the Organisation for Security and Cooperation in Europe, can play a supportive and mediating role.

Similar pragmatic questions arise in relation to Europe's other neighbours in the East, namely Belarus, Ukraine and Moldova. The major issues concern border security, the prevention of illegal migration and support for democratisation processes and regional trade cooperation.

In the case of Belarus, the various political actors (both the state and civil society) in the EU must coordinate more closely in future with a view to achieving greater democracy in the country and improving its economic situation. In this respect the USA’s desire to play a more active role in the EU's eastern neighbouring country is important.3 EU level actors must not confine their activities to relations with the official structures of the Belarus Republic, but initiate policies which assist a democratic regime change.

In Ukraine, one of the most highly populated European states, the process of economic and political transformation has not yet proved successful in many respects. Groups operating on an oligarchic basis have gained control of the economy and political structures both nationally and regionally. Incentives need to be offered, by means of cooperation proposals with concrete conditions and by strengthening the democratic forces, so that the country can develop in line with the European mainstream.

In Moldova, only some of the state structures are functioning, since the eastern part of the country is refusing to submit to the authority of the central government. Although the civil war has ended, the country remains split and is by far the poorest in Europe with a per capita GDP of 1.8% of the EU average. This means that Moldova remains a potential source of conflict. The EU must help it build up state structures and stimulate economic activity.

In all these states, the EU should do more to ensure respect for democratic processes (holding free and fair elections at the due time) and fundamental human rights. New instruments of economic cooperation need to be found for the entire region between the EU's new eastern border and the Russian Federation. In the case of Belarus, this is conditional on a move towards democratisation.

The EU's indirect neighbours in the East include the Caucasian Republics of Armenia, Azerbaijan and Georgia. A whole range of conflicts have

3 For the next two years, the US Congress has granted more than US$ 40 million for aid to democracy in Belarus. been destabilising the Caucasus for more than a decade and could spill over to other regions given these countries' importance in terms of energy policy and their closeness to Russia and to the Middle East. Moreover, the internal political development in all three states looks problematic in political terms, since either state structures are disintegrating or there are emerging signs of a trend towards authoritarianism.

The EU's foreign policy approach must include making constructive use of and involving existing institutions, notably the Council of Europe and the OSCE, since their structures include every European Member State.

VI. South East Europe

The EU has offered the South East European states a definite prospect of accession. Until this accession, the date of which has not yet been fixed, a number of economic, political and security issues need to be clarified. Time will tell whether the EU will have to treat the individual states separately or as a regional bloc.

Similar priorities need to be set in regard to the South East European states. In view of the civil wars in former Yugoslavia and ethnic problems and conflicts in other South East European states, the EU must continue its endeavours to stabilise these states, some of them young, and to prevent potential conflicts. The Stability Pact for the Balkans, which reflects a major political and material commitment on the part of Europe, must be pursued at a high level. At the same time, the EU must continue to take active political and, where appropriate, military conflict-prevention measures.

Yet the Stability Pact can only help these countries to help themselves. If South East Europe is to achieve peace and development on a long-term basis, it will have to make considerable efforts itself and be prepared to resolve conflicts peacefully, aside from receiving external aid. That is the only way to achieve the aim of gradually integrating all the countries of South East Europe into European structures.

There must be consistent use of the association process, while the question of individual states' accession to the EU has to be evaluated on the basis of the results achieved. Romania and Bulgaria have an annual GNP of no more than US $ 1 670 and 1 520 per capita respectively, which means they are more than US $ 1000 below that of all the other candidate states including Turkey, despite the latter's fluctuating and frequently negative growth rates4. Before they join, they will therefore have to make a considerable effort if they really want to benefit from accession to the EU.

Serbia-Montenegro, Bosnia, Macedonia and Albania have similar economic data. However, some of the countries in this region are developing dynamic economies, despite weak economic conditions resulting from transformation crises and the aftermath of war in the 1990s. However, domestic tensions remain prevalent. Albania in particular has institutional difficulties, despite being an important example of a secularised Muslim state. It is in the EU's interest to continue to promote stability in these states, regardless of whether they have any immediate prospects for accession. Since religious and ethnic tensions are

4 Figures from the year 2000.

130 interdependent in these countries, the EU must continue to pursue a common strategy towards them.

It remains to be seen whether Croatia will be able to join the EU sooner than its southern neighbours. Its economic performance is considerably better (per capita GNP of US $ 4 620), but it faces structural economic problems. It also needs to further stabilise the democratic state and ensure cooperation with European and international organisations, in particular the International Criminal Tribunal in The Hague. Other EU membership conditions include the return of refugees and the restoration of their property, as well as practical long-term evidence of respect for minority rights.

Europe should aim to draw up a road map for the accession of the other Western Balkan states, in addition to offering Bulgaria and Romania the prospect of accession during this decade. Here it must be made clear that Europe will not tolerate any armed ethnic conflicts or the formation of new states. With reference in particular to Serbia, Kosovo and Montenegro, despite the recent outbursts of organised violence, we do not advocate redrawing present borders, as it might set off dangerous precedents for other states to question their borders in this highly volatile area. There must be progress towards offering the Western Balkan states a common prospect for an accession date, so that existing and potential conflicts between various peoples and states can be transformed into cooperation. In this respect the PES believes it is important that social democratic forces are playing a decisive role in most of the states of this region.

VII. Turkey

The Copenhagen Summit set out the next steps in relation to Turkey's accession to the EU. Respect for the Copenhagen criteria thus remains the yardstick for further progress towards accession and once these political criteria are fulfilled, accession negotiations should start. The prospect of accession has led the Turkish government to take encouraging and courageous steps to undertake the necessary reforms.

However, in spite of the determination of the government a clear framework for guaranteeing political, civil, economic, social and cultural rights is not yet established and it will require tremendous efforts to underline the drastic and fundamental character of the transformation of Turkey towards possible EU-membership. Turkey will also have to reinforce all political and cultural methods to increase Turkish citizen's knowledge of the EU's ideals and values. An active and free civil society and engagement and cooperation with NGOs will be of crucial importance to strengthen the democratic nature of the society.

At the same time the EU itself must be pepared for Turkey's possible accession and the new geo-political situation. A detailed debate about the consequences still has to take place.

The EU would need urgent reforms in a number of key policy areas such as agricultural and structural funds policy as well as in financial and institutional terms in order to cope with further enlargements. We also have to reflect how Europe can maintain its social model and achieve economic and social cohesion.

Due to Turkey's specific geographic, economic and cultural situation and the weight of its population it will be a parntner of special importance. In the event that accession negotiations with Turkey do not begin in the near future, the question arises whether other forms of security policy cooperation between the EU and Turkey would be appropriate. During this whole process it is important to achieve the objectives that have been set rather than following timetables that might at times prove unrealistic.

VIII. The Mediterranean region

Thanks to the Barcelona process the EU has been pursuing a strategy towards the Mediterranean region since the mid 1990s. The major issues at stake here relate to problems of migration and the Middle East conflict. The EU must continue to take a systematic approach to these problems in order to improve security in the region.

Security policy concerns also play an important part in the EU's cooperation with the Mediterranean region, as reflected for example in the Charter for Peace and Stability in the framework of the Barcelona process5. Here, the Israel-Palestine conflict and related conflicts will continue to have special significance for Europe and require an EU commitment over and above the Barcelona process. This applies just as much to the activities in the context of the Middle East Quartet as to aid for the Palestinian Autonomous Authority and the special relations with Israel. Security policy issues are also prominent throughout the Mediterranean area, not least in regard to combating terrorism.

In addition, the EU must do more to formulate a preventive policy in face of a possible influx of migrants that could exceed the EU's absorption capacity. Over the last 20 years the population growth in the region was ca. 2.5%6 a year, compared with 0.4% in the EU.

As its biggest trading partner (47% of all the region's imports come from the EU, 56% of exports go to the Union) the EU also has a special responsibility, which will further increase if a Euro-Mediterranean free trade area is established by 2010.

The economic and social development of the Mediterranean region is the key to the long-term prevention of terrorism, drug trafficking and illegal immigration. For this reason, the Barcelona process and the MEDA programme need to be reinforced.

Europe and the USA must enhance their cooperation in the Mediterranian region. In the area of traditional security policy we invite NATO to closer cooperation with the EU, on the basis of NATO's multiple initiatives and experiences.

IX. Challenges facing EU policy

The EU must prioritise the adaptation of its foreign policy strategies and instruments for the post-enlargement period. It must review the existing structures and means of assistance at its disposal and develop new measures where necessary.

5 The basis of this process is the Barcelona declaration of 1995, which was signed by the EU states and Morocco, Algeria, Tunisia, Egypt, Israel, the Palestinian Autonomous Authority, Jordan, Lebanon, Syria, Turkey, Cyprus and Malta and thus includes all the Mediterranean states except Libya. 6 1980-2000; the Barcelona process states without the candidate states, plus Libya.

132 In order to meet the challenges and seize the opportunities resulting from its new neighbours, the EU needs to formulate a post-enlargement strategy for European foreign policy. It will have to establish different approaches for each different region, which is on concrete situations, reflects the Union's interests and takes adequate account of its neighbours' interests.

In this context, it is necessary to clarify whether the EU's external assistance programmes (Tacis, MEDA and CARDS) and other financial resources (located in the European Investment Bank and the European Bank for Reconstruction and Development) are adequate in terms of both quantity and quality and whether the partners are using them in the appropriate manner. It is also worth considering whether new instruments should be created in certain cases, for example, an investment bank jointly established by the Russian Federation and the European Union.

One instrument for achieving this could be the common strategies that have been set out in the Common Foreign and Security Policy since the Amsterdam Treaty and that have existed for Russia and the Mediterranean since 1999 and 2000 respectively. Matters relating to association agreements, free trade areas and accession prospects should also be regulated in this context. At the same time, there is a need to check again whether association agreements should in general be directed at eventual accession. The strategies should cover all aspects of political, security policy, economic and also cultural questions. Their main focus must differ according to region: there should be no uniform blueprint for the enlarged EU's strategies towards its neighbours.

Europeans must be able to represent their common interests effectively and to that end determine common, long-term prospects that are fully endorsed by all Member States. The countries that will join the Union in 2004 must, therefore, be involved in the formulation of common strategies at an early stage, given that they will become regions that border directly on Eastern and South East Europe.

X. PES tasks

As one of the main political forces in the European Union, the PES must play a major role on two levels. First, it must build on or establish partnership and cooperation with the parties of the neighbouring regions. Second, it should use its influence vis-à-vis the EU institutions in order to ensure that the EU pursues a forward-looking foreign policy.

Even at this stage the PES must prepare itself for the fact that its new Eastern and South Eastern neighbours will have features that distinguish them from its current neighbours. This means that the PES must be more proactive in the Eastern European countries – Belarus, Ukraine, Moldova and, not least, Russia – in order to pave the way for political developments in line with its ideas.

Much the same applies to the Balkan states that EU membership aspirations. The PES must build on links with existing strong social democratic forces in some of these countries.

The PES will formulate a policy towards the Mediterranean parties. It is crucial that trade unions and NGOs play a major role in many of these countries and that the PES establish a dialogue with them. At the same time, Western European social democrats face the problem that their ideological orientation sometimes meets with little sympathy in the Eastern and South East European countries because of the latter's historical experiences.

As an overall strategy, the PES will intensify its activities in these regions, formulate a policy of PES membership, co-ordinate the policy of its member parties more closely and improve the existing instruments (such as the Forum for Democracy and Solidarity). This also means close cooperation with political organisations of a social democratic tendency and with the PES Group in the European Parliament. Over and above this, it is the task of the PES to uphold its foreign policy approach towards and within the EU institutions with a view to directing European foreign policy along these lines.

PARTY OF EUROPEAN SOCIALISTS  Tel +32 2 284 29 76  Fax +32 2 230 17 66  [email protected]  www.pes.org

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