Report on Europe and the Global Information Society

Supplement 2/94

Growth, competitiveness and employment White Paper follow-up

Report on Europe and the global information society

Interim report on trans-European networks

Progress report on employment

Extracts of the conclusions of the Presidency of the Corfu European Council

This document reproduces the infonnation society report on pages 5-39 and the Presidency conclusions on pages 126- 134. The other two reports are available as separate documents on AEI-EU.

Blank page not reproduced: 8

European Commission Cataloguing data can be found at the end of this publication

Luxembourg: Office for Official Publications of the European Communities, 1994

ISBN 92-826-8547-

(Q ECSC-EC-EAEC, Brussels. Luxembourg, 1994

Reproduction is authorized, except for commercial purposes, provided the source is acknowledged

Printed in Germany General contents

Europe and the global information society

Recommendations of the high-level group on the information society to the Corfu European Council (Bangemann group)

Trans-European networks

Interim report of the chairman of the group of personal representatives of the Heads of State or Government to the Corfu European Council (Christophersen group)

Progress report on employment 103

Results of Mr Flynn s tour of capitals

Extracts of the conclusions of the Presidency of the Corfu European Council (24 and 25 June 1994) 125

S. 2/94 Europe and the global information society Recommendations of the high-level group on the information society to the Corfu European Council (Bangemann group) In its Brussels meeting of December 1993, the European Council requested that a report be prepared for its meeting on 24 and 25 June 1994 in Corfu by a group of prominent persons on the specific measures to be taken into consideration by the Community and the Member States for the infrastructures in the sphere of information. On the basis of this report, the Council will adopt an operational programme defining precise procedures for action and the necessary means.

The following were members of the group chaired by Mr Martin Bangemann Member of the Commission:

Peter L. Bonfield (Chairman and Chief Executive, ICL), Enrico Cabral da Fonseca (Presidente Companhia Comunica~aoes nacionais), Etienne Davignon (president SGB), Peter J. Davis (Chairman, Reed Elsevier), Jean-Marie Descarpentries (President Bull), Carlo De Benedetti (Presidente Amministratore Delegato, Ol- ivetti), Brian Ennis (Managing Director, IMS), Pehr G. Gyllenhammer (former Executive Chairman, AB Volvo), Hans Olaf Henkel (Chairman and Chief Execu- tive Officer, IBM Europe), Anders Knutsen (Administrerende Direktor, Bang & Olufsen), Pierre Lescure (President Directeur, General Canal +), Constantin Makropoulos (former Managing Director ELSYP (Hellenic Information Sys- tems)), Pascual Maragall (Alcalde de Barcelona, Vicepresidente de .POLIS), Lothar Hunsel (designierter Vorsitzender der Geschiiftsfiihrung DeTeMobilfunk GmbH), Romano Prodi (Presidente Direttore Generale, IRI), Gaston Egroont Thorn (Presi- dent du Conseil d' administration du CLT), Jan D. Timmer (Voorzitter, Philips Electronics), Candido Velazquez Gastelu (presidente, Telef6nica), Hein~ich von Pierer (Vorsitzender des Vorstandes, Siemens AG).

S. 2/94 Contents

Chapter 1: The information society ~ new ways of living and working together A revolutionary challenge to decision makers Partnership for jobs If we seize the opportunity A common creation or a still fragmented Europe? What we can expect for. . . The social challenge Time to press on An action plan New markets in Europe s information society

Chapter 2: A market-driven revolution A break with the past Ending monopoly Enabling the market Towards a positive outcome

Chapter 3: Completing the agenda Protection of intellectual property rights (IPR) Privacy Electronic protection (encryption), legal protection and security Media ownership The role of competition policy Technology

Chapter 4: The building blocks of the information society The opportunity for the Union strengthening its existing networks and accelerating the creation of new ones New basic services are needed Blazing the trail ten applications to launch the information society

Chapter 5: Financing the information society - a task for the private sector

Chapter 6: Follow-up

An action plan - summary of recommendations

S. 2/94 This report urges the European Union to put its faith in market mechanisms as the motive power to carry us into the information age.

This means that actions must be taken at the European level and by Member States to strike down entrenched positions which put Europe at a competitive disadvantage:

0 it means fostering an entrepreneurial mentality to enable the emergence of new dynamic sectors of the economy 0 it means developing a common regulatory approach to bring forth a competitive, Europe-wide, market for information services

0 it does NOT mean more public money, financial assistance, subsidies di- rigisme, or protectionism. In addition ot its specific recommendations, the group proposes an action plan of concrete initiatives based on a partnership between the private and public sectors to carry Europe forward into the information society.

S. 2/94 Chapter 1: The information society new ways of living and working tog.ether

A revolutionary challenge to decision ma.kers

Throughout the world, information and commu- This revolution adds huge new capacities to nication technologies are generating a new in- human intelligence and constitutes a resource dustrial revolution already as significant and which changes the way we both work and live far-reaching as those of the past. together.

It is a revolution based on information, itself the Europe is already participating in this revolution expression of human knowledge. Technological but with an approach which is still too fragmen- progress now enables us to process, store, re~ tary and which could reduce ~xpected benefits. trieve and communicate information in whatever An information society is a means to achieve so form it may take, whether oral, written or visual many of the Union s objectives. We have to get unconstrained by distance, time and volume. it right, and get it right now.

Partnership for jobs

Europe s ability to participate, to adapt and to Our work has been sustained by the conviction exploit the new technologies and the opportuni- expressed in the Commission s White Paper, ties they create, will require partnership between Growth, Competitiveness and Employment' individuals, employers, unions and governments that' ... the enormous potential for new services dedicated to managing change. If we manage the relating to production, consumption, culture and changes before us with determination and under~ leisure activities will create large numbers of standing of the social implications, we shall all new jobs...'. Yet nothing will happen automati- gain in the long run. cally. We have to act to ensure that these jobs are created here, and soon. And that means public and private sectors acting together.

If we seize the opportunity

All revolutions generate uncertainty, discontinu- In the face of quite remarkable technological ity and opportunity. Today s is no exception. developments and economic opportunities, all How we respond and how we turn current the leading global industrial players are reassess- opportunities into real benefits, will depend on ing their strategies and their options. how quickly we can enter the European information society.

A common creation or a still fragmented Europe?

The first countries to enter the information decade, face disastrous declines in investment society will reap the greatest rewards. They will and a squeeze on jobs. set the agenda for all who must follow. By contrast, countries which temporize, or favour Given its history, we can be sure that Europe will half-hearted solutions, could, in less than a take the opportunity. It will create the informa-

S. 2/94 . .

Europe and the global information society

tion society. The only question is whether this amalgam of individual initiatives by Member will be a strategic creation for the whole Union States with repercussions on every policy area or a more fragmented and much less effective from the single market to cohesion.

What we can expect for.

0 Europe s citizens and consumers: European business and small and medium~ A more caring European society with a signifi- sized enterprises: cantly higher quality of life and a wider choice More effective management and organization, of services and entertainment. access to training and other services, data links with customers and suppliers generating greater 0 The content creators: competitiveness. New ways to exercise their creativity as the information society welcomes new products and services. 0 Europe s telecommunications operators: 0 Europe s regions: The capacity to supply an ever wider range of New opportunities to express their cultural tra- new high value-added services. ditions and identities and, for those standing on the geographical periphery of the Union, a mini- mizing of distance and remoteness.

0 The equipment and software suppliers; the Governments and administrations: computer and consumer electronics industries. More efficient, transparent and responsive public New and strongly-growing markets for their services, closer to the citizen and at lower cost. products at home and abroad.

The social challenge

The widespread availability of new information risks, or we bow to them, together with all the tools and services will present fresh opportuni- uncertainties this may entail. ties to build a more equal and balanced society and to foster individual accomplishment. The The main risk lies in the creation of a two-tier information society has the potential to improve society of have and have-nots, in which only a the quality of life .of Europe s citizens, the part of the population has access to the new efficiency of our social and economic organi- technology, is comfortable using it and can fully zation and to reinforce cohesion. enjoy its benefits. There is a danger that individuals will reject the new information culture The information revolution prompts profound and its instruments. changes in the way we view our societies and also in their organization and structure. This Such a risk is inherent in the process of structural presents us with a major challenge: either we change. We must confront it by convincing grasp the opportunities before us and master the people that the new technologies hold out the

S. 2/94 Europe and the global information society prospect of a major step forward towards a finds its full justification. In order best to raise European society less subject to such constraints awareness, regional and local initiatives, whether as rigidity, inertia and compartmentalization. By public or private should be encouraged. pooling resources that have traditionally been separate, and indeed distant, the information The arrival of the information society comes in infrastructure unleashes unlimited potential for tandem with changes in labour legislation and acquiring knowledge, innovation and creativity. the rise of new professions and skills. Continu- ous dialogue between the social partners will be extremely important if we are to anticipate and Mastering risks, maximizing to manage the irnrninent transformation of the benefits workplace. This concerted effort should reflect new relationships at the workplace induced by the changing environment. Thus, we have to find ways to master the risks and maximize the benefits. This places respon- More detailed consideration of these issues ex- sibilities on public authorities to establish safe- ceeds the scope of this report. The group wishes guards and to ensure the cohesion of the new to .stress that Europe is bound to change, and that society. Fair access to the infrastructure will it is in our interest to seize this opportunity. The have to be guaranteed to all, as will provision of information infrastructure can prOve an extraor- universal service, the definition of which must dinary instrument for serving the people of evolve in line with the technology. Europe and improving our society by fully reflecting the original and often unique values A great deal of effort must be put into securing which underpin and give meaning to our lives. widespread public acceptance and actual use of the new technology. Preparing Europeans for At the end of the day, the added value brought by the advent of the information society is . the new tools, and the overall success of the priority task. Education, training and promo- information society, will depend on the input tion will necessarily playa central role. The made by our people, both individually and in White Paper s goal of giving European citizens working together. We are convinced that Euro- the right to life-long education and training here peans will meet this challenge.

Time to press on Why the urgency? Because competitive suppli- need to do more. However this is also true for the ers of networks and services from outside Eu- rest of the world' s trading nations. rope are increasingly active in our markets. They are convinced, as we must be, that if Europe The importance of the sector was made evident arrives late our suppliers of technologies and by its prominence during the Uruguay Round of services will lack the commercial muscle to win GATT negotiations. This importance is destined a share of the enormous global opportunities to increase. which lie ahead. Our companies will migrate to We should not be sceptical of our possibilities more attractive locations to do business. Our for success. We have major technological, entre- export markets will evaporate. We have to prove preneurial and creative capabilities. However them wrong. the diffusion of,information is still too restricted and too expensive. This can be tackled quickly through regulatory reforms. Tide waits for no man, and this is a revolutionary tide, sweeping through economic and social life. Public awareness of the technologies has hith- We must press on. At least we do not have the erto been too limited. This must change. Politi- usual European worry about catching up. In cal attention is too intermittent. The private some areas we are well placed, in others we do sector expects a new signal.

S. 2/94 Europe and the global information society

An action plan

This report outlines our vision of the information different from that of other infrastructural invest- society and the benefits it will deliver to our ments where public funds are still crucial, such citizens and to economic operators. It points to as transport. areas in which action is needed now so we can start out on the market-led passage to the new This sector is in rapid evolution. The market will age, as well as to the agents which can drive us drive it will decide on winners and losers. Given there. the power and pervasiveness of the technology, this market is global. As requested in the Council's mandate, we advocate an action plan based on specific initia- The prime task of government is to safeguard tives involving partnerships linking public and competitive forces and ensure a strong and private sectors. Their objective is to stimulate lasting political welcome for the information markets so that they can rapidly attain critical society, so that demand-pull can finance growth mass. here as elsewhere.

In this sector, private investment will be the By sharing our vision, and appreciating its ur- driving force. Monopolistic, anticompetitive en- gency, Europe s decision-makers can make the vironments are the real roadblocks to such in- prospects for our renewed economic and social volvement. The situation here is completely development infinitely brighter.

New markets in Europe s information society Information has a multiplier effect which will Markets for business energize every economic sector. With market driven tariffs, there will be a vast array of novel information services and applications: Large and small companies and professional users are already leading the way in exploiting the new technologies to raise the efficiency of from high-cost services, whose premium their management and production systems. And prices are justified by the value of benefits more radical changes to business organization delivered, to budget price products designed for and methods are on the way. mass consumption;

Business awareness of these trends and oppor- from services to the business community, tunities is still lower in Europe compared to the which can be tailored to the needs of a specific US. Companies are not yet fully exploiting the potential for customer, to standardized packages which will internal reorganization and for sell in high volumes at low prices; adapting relationships with suppliers, contrac- tors and customers. We have a lot of pent up demand to fill.

from services and applications which employ existing infrastructure, peripherals and equip- In the business markets, teleconferencing is one ment (telephone and cable TV networks, broad- good example of a business application worth casting systems, personal computers, CD players promoting, while much effort is also being and ordinary TV sets) to those which will be dedicated worldwide to the perfection of carried via new technologies, such as integrated telecommerce and electronic document inter- broadband, as these are installed. change (ED I).

S. 2/94 Europe and the global information society

Both offer such cost and time advantages over American experience already shows that the traditional methods that, once applied, electronic development markets encounter a number of procedures rapidly become the preferred way of obstacles and uncertainties. doing business. According to some estimates the handling of an electronic requisition is one tenth Given the initial high cost of new pay-as-you- of the cost of handling its paper equivalent view entertainment services, and of the related while an electronic mail (E-mail) message is equipment, as well as the high cost of bringing faster, more reliable .and can save 95% of the fibre optics to the home, a large mass consumer cost of a fax. market will develop more easily if entertainment services are part of a broader package. This Electronic payments systems are already usher- could also include information data, cultural well as ing in the cashless society in some parts of programming, sporting events, as Europe. We have a sizeable lead over the rest of telemarketing and teleshopping. Pay-as-you- the world in smart-card technology and applica~ view for on-line services, as well as advertising, tions. This is an area of global market potential. will both be necessary as a source of revenue. To some extent, existing satellite and telephone infrastructure can help to serve the consumer Markets for small and market in the initial phase.

medium-sized enterprises At the moment, this market is still only embry- onic in Europe and is likely to take longer to grow than in the United States. There, more than Though Europe s 12 million SMEs are rightly 60% of households are tapped by cable TV regarded as the backbone of the European systems which could .also carry text and data economy, they do need to manage both informa- services. In Europe, only 25% are similarly tion and managerial resources better. equipped, and this figure masks great differences between countries, e.g. Belgium (92%) and They need to be linked to easy access, cost- Greece (1 to 2%). effective networks providing information on . production and market openings. The competi- Another statistic: in the United States there are tiveness of the whole industrial fabric would be 34 PCs per hundred citizens. The European sharpened if their relationships with large com- figure overall is 10 per hundred, though the UK, panies were based on the new technologies. for instance, at 22 per hundred, is closer to the US level of computer penetration. Networked relationships with universities, research institutes and laboratories would boost Lack of available information services and poor their prospects even more by helping to remedy computer awareness could therefore prove chronic R&D deficiencies. Networking will also handicaps in Europe. Telecommunication net- diminish the isolation of SMEs in Europe s less works are, however, comparable in size and advantaged regions, helping them to upgrade cover, but lag behind in terms of utilization. their products and find wider markets. These networks, therefore, can act as the basic port of access for the initial services, but stimu- lation of user applications is still going to be Markets for consumers necessary.

Such structur~l weaknesses need not halt These are expected to be richly populated with progress. Europe s technological success with teleshopping services, from home banking and CD-ROM and CD-I could be the basis for a raft to a near-limitless choice of entertainment on of non-networked applications and services dur- demand. ing the early formative years of the information society. These services on disk have consider- In Europe, like the United States, mass consumer able export potential if Europe s audio-visual markets may emerge as one of the principal industry succeeds in countering current US driving forces for the information society. dominance in titles.

S. 2/94 Europe and the global information society

In terms of the market, France MinUel network of our creators, most of the programmes and already offers an encouraging example that Eu- most of the stocks of acquired rights are not in ropean consumers are prepared to buy informa~ European hands. A fast growing European home tion and transaction services on screen, if the market can provide European industry with an access price is right. It reaches nearly 30 million opportunity to develop a home base and to private and business subscribers through six exploit increased possibilities for exports. million small terminals and carries about 15 000 different services. Minitel has created many new Linguistic fragmentation of the market has long jobs , directly and indirectly, through boosting been seen as a disadvantage for Europe s enter- business efficiency and competitiveness. . tainment and audio-visual industry, especially with English having an overwhelming domi~ In the UK, the success of the Community- nance in the global market ~ a reflection of the sponsored ' Homestead' programme, using CD- US lead in production and, importantly, is indicative, as is the highly successful launch of in distribution. This lead, which begins with a dedicated (American) cable teleshopping chan~ cinema and continues with television, is likely to nel. be extended to the new audio-visual areas. How- ever once products can be easily accessible to Meanwhile in the US, where the consumer consumers, there will be more opportunities for market is more advanced, video-on-demand and expression of the multiplicity of cultures and home shopping could emerge as the most popu- languages in which Europe abounds. lar services. Europe s audio-visual industry is also burdened with regulations. Some of these will soon be Audio-visual markets rendered obsolete by the development of new technologies, hampering the development of a dynamic European market. Our biggest structural problem is the financial and organizational weakness of the European As a first step to stimulating debate on the new programme industry. Despite the enormous rich- challenges, the Commission has produced a ness of the European heritage, and the potential Green Paper on the audiovisual industry.

S. 2/94 Chapter 2: A market-driven revolution

break with the past

The group is convinced that technological progress and the evolution of the market mean that Europe must make a break from policies based on principles which belong to a time before the advent of the information revolution.

The key issue for the emergence of new markets is the need for a new regulatory environment allowing full competition. This will be a prerequisite for mobilizing the private capital necessary for innovation, growth and development.

In order to function properly, the new market requires that all actors are equipped to participate successfully, or at least that they do not start with significant handicaps. All should be able to operate according to clear rules, within a single fair and competitive framework.

Ending monopoly

This is as true for the telecommunications op- 0 TOs relieved of political constraints, such as: others. It is now generally erators (Tas) as for subsidizing public functions; recognized as both necessary and desirable that external R&D activities; should be re- the political burdens on them contributions to land planning and management moved, their tariffs adjusted and a proper regu- objectives; latory framework created. Even the operations of the burden to carry alone the responsibility of those TOs whose status has already evolved over universal service; recent years are not fully in line. 0 a proper regulatory framework designed to It is possible to end monopoly. In future, all achieve: licensed public operators should assume their market regulation to enable and to protect com- share of public service responsibilities (e.g. uni- petition; versal service obligation and the provision of equal access to networks and services). a predictable environment to make possible strategic planning and investment; A competitive environment requires the following: adjustment of tariffs.

S. 2/94 Europe and the global information society Enabling the market

service use would be guided by the principles of transparency and non-discrimination, comple- mented by practical rules for dispute resolution and speedy remedy against abuse dominance.

In order for the market to operate successfully, the group has identified the following objectives Interconnection and recommendations: and interoperability

Two features are essential to the deployment of Evolution in the regulatory the information infrastructure needed by the information society: one is a seamless intercon- domain nection of networks and the other that the services and applications which build on them should be able to work together (interoperabil- Identify and establish the minimum of regulation ity). needed, at the European level, to ensure the rapid emergence of efficient European information infrastructures and services. The terms of refer- In the past the political will to interconnect ence of the authority which will be responsible national telephone networks resulted in hundreds for the enforcement of this regulation is a ques~ of millions of subscriber connections world~ tion that will require prompt attention. wide. Similar political determination and corre~ sponding effort are required to set up the con~ The urgency of the matter is in direct relation to siderably more complex information infrastruc- the prevailing market conditions. A clear re- tures. quirement exists for the new ' rules of the game to be outlined as soon as possible. The market- place will then be in a position to anticipate the forthcoming framework, and the opportunity will exist for those wishing to move rapidly to benefit from these efforts.

The authority will need to address:

the regulation of those The challenge is to provide interconnections for operations which a variety of networking conditions (e. because of their Community-wide nature g. fixed , need and new type of networks, such as mobile and to be addressed at European level, such as licensing, network satellite) and basic services (e.g. integrated ser- interconnection when and vice digital network where necessary, management of shared scarce (ISDN)). Currently, the positions of monopoly operators are being resources (e.g. radio-frequency allocation , sub- eroded in these fast-developing areas. scriber numbering) and advice to Member States' regulatory authorities on general issues. Joint commercial decisions must be taken by the 0 a single regulatory framework valid for all TOs without delay to ensure rapid extension of operators, which would imply lifting unequal European basic services beyond telephony. This conditions for market access. It would also would improve their competitive position vis- ensure that the conditions for network access and vis non-European players in their own markets.

S. 2/94 Europe and the global information society

The European information society is emerging These should be encouraged to establish priori- from many different angles. European infrastruc- ties based on market requirements and to iden- ture is evolving into an ever tighter web of tify publicly available specifications, originated networks, generic services, applications and by the market, which are suitable for rapid equipment, the development, distribution and transformation into standards (e.g. through fast- maintenance of which occupy a multitude of track procedures). sources worldwide. at the le-v-el .of the Union: In an efficient and expanding information infrastructure, such components should. work to- European standardization policy should be re~ gether. viewed in the light of the above. When the market is not providing acceptable technical Assembling the various pieces of this complex solutions to achieve one of the European system to meet the challenge of interoperability Union s objectives, a mechanism should be would be impossible without clear conventions. sought to select or generate suitable technolo- Standards' are such conventions. gies.

Open ' systems standards' will play an essential World-wide interoperability should be promoted role in building a European information infra~ and secured. structure.

Standards institutes have an honourable record in producing European standards, but the standardization process as it stands today raises a number of concerns about fitness for purpose lack of interoperability, and priority setting that is not sufficiently market -driven.

. Action is required at three different levels: Urgent action to adjust at the level of operators, public procurement and investors: tariffs

Following the successful example of GSM digi- , long distance and tal mobile telephony, market players (industry, Reduction in international leased-line tariffs will trigger expansion in the TOs, users) could establish memoranda of un- , generating additional derstanding (MoU) to set the specifications re- usage of infrastructures revenues, and simultaneously giving a major quirements for specific application objectives. boost to generic services and innovative appli- These requirements would then provide input to the competent standardization body. This type of cations. mechanism would adequately respond to market needs. In most cases, the current unsatisfactory tariff situation results from the TOs' monopoly status Operators, public procurement and investors and a variety of associated political constraints. should adopt unified open standard~based solutions for the provision and the procurement of The introducti'on of competitive provision information services in order to achieve global services and infrastructures implies that TOs interoperability. would be able to adjust their tariffs in line with market conditions. Rebalancing of international at the level of the European standards and long-distance tariffs against local tariffs is a bodies: critical step in this process.

S. 2/94 Europe and the global information society

extensive promotion and use of existing and forthcoming European networks and services.

awareness campaigns, notably directed at public administrations SMEs and educational institutions.

Two elements should accompany the process:

0 TOs released from politically imposed budgetary constraints; In addition, everyone involved in building up the information society must be ina position to adapt strategies and forge alliances to enable 0 a fair and equitable sharing of the burden of them to contribute to, and benefit from, overall providing universal services between all licensed growth in the field. operators. Secure the world-wide Fostering critical mass dimension

Market segments based on the new information infrastructures cannot provide an adequate return on investment without a certain level of demand. In most cases, competition alone will not provide such a mass, or it will provide it too slowly.

A number of measures should be taken in order to reach this goal:

Since information infrastructures are borderless cooperation should be encouraged among competitors so as to create the required size and in an open market environment, the information momentum in particular market areas. The al- society has an essentially global dimension. ready mentioned GSM MoU is an archetypal example of how positive this approach can be. The actions advocated in this report will lead to a truly open environment, where access is provided to all players. This openness should find agreement between public administrations to its counterpart in markets and networks of other achieve common requirements and specifica- regions of the world. It is obviously of para- tions and a commitment to use these in procure- mount importance for Europe that adequate steps ment at national and European levels. are taken to guarant~e equal access.

S. 2/94 Europe and the global information society Towards a positive outcome

The responses outlined above to the challenges opportunities for TOs, service providers and posed by the deployment of the information industry. For the others, the price to pay for a society will be positive for all involved in its slower pace of liberalization will be a stiffer creation and use. challenge from more dynamic foreign competitors and a smaller domestic market. Time is Telecommunications, cable and satellite opera- running out. If action is not accelerated, many tors will be in a position to take full advantage of benefits will arrive late, or never. market opportunities as they see fit, and to expand their market share. It is an essential recommendation of the group that governments support accelerated liberaliza- The service provider and content industries will tion by drawing up clear timetables and dead- be able to offer innovative products at attractive lines with practical measures to obtain this goal. prices.

In this context, the 1993 Council Resolution Citizens and users will benefit from a broader remains a useful point of reference. Even range of competing services. before the specified d4tes, governments should take best advantage of its built-in flexibility to Telecommunication equipment and software seize the opportunities offered by a burgeoning suppliers will see an expanding market. competitive market. They should speed up the opening to competition of infrastructures and Those countries that have already opted for of those services that are still in the monopoly faster liberalization, are experiencing rapidly area, as well as remove political burdens im- expanding domestic markets that provide new posed on their national TOs.

S. 2/94 Europe and the global information society

Chapter Completing the agenda

Several policy issues have to be faced in parallel sufficient to justify and attract the required with actions needed to create an open, competi- financing of high performance trans-European tive and market-driven information society. Dis~ information networks. parate national regulatory reactions carry a very real threat of fragmentation to the internal mar- Therefore, applying the single market principle ket. of freedom of movement of all goods and services, to the benefit of Europeans every- Here there are two different sets of issues and where, must be our key objective. problems: one relating to the business community, the other more to individuals and the information society, with specific reference to privacy.

As we move into the information society, a regulatory response in key areas such as intel~ lectual property, privacy and media ownership is required at the European level in order to maximize the benefits of the single market for all players. Only the scale of the internal market is

Protection of intellectual property rights (IPR) While there is a great deal of information that is in the public domain, there is also information containing added value which is proprietary and needs protection via the enforcement of intellectual property rights. IPRs are an important factor in developing a competitive European industry, both in the area of information technology and more generally across a wide variety of industrial and cultural sectors.

Creativity and innovation are two of the Union In this global information market-place, com- most important assets. Their protection must mon rules must be agreed and enforced by continue to be a high priority, on the basis of everyone. Europe has a vested interest in .ensur- balanced solutions which do not impede the ing that protection of IPRs receives full attention operation of market forces. and that a high level of protection is maintained. Moreover, as the technology advances, regular The global nature of the services that will be world-wide consultation with all interested parties, both the suppliers and the user communi- provided through the information networks means that the Union will have to be party to ties, will be required. international action to protect intellectual property. Otherwise, serious difficulties will arise if regulatory systems in different areas of the world Initiatives already under way within Europe are operating on incompatible principles which such as the proposed Directive on the legal permit circumvention or create jurisdictional protection of electronic databases, should be uncertainties. completed as a matter of priority.

S. 2/94 Europe and the global information society

Meanwhile, in order to stimulate the develop- In particular, the ease with which digitized ment of new multimedia products and services information can be transmitted, manipulated and existing legal regimes both national and adapted requires solutions protecting the content Union will have to be reexamined to see providers. But, at the same time, flexibility and whether they are appropriate to the new infor- efficiency in obtaining authorization for the mation society. Where necessary, adjustments exploitation of works will be a prerequisite for a will have to be made. dynamic European multimedia industry.

Privacy

The demand for the protection of privacy will Disparities in the level of protection of such rightly increase as the potential of the new privacy rules create the risk that national authori- technologies to secure (even across national ties might restrict free circulation of a wide frontiers) and to manipulate detailed information range of new services between Member States in on individuals from data, voice and image order to protect personal dat~. sources is realized. Without the legal security of a Union~wide approach, lack of consumer confidence will certainly undermine rapid development of the information society.

Europe leads the world in the protection of the fundamental rights of the individual with regard to personal data processing. The application of new technologies potentially affects highly sen- sitive areas such as those dealing with the images of individuals, their communication . their movements and their behaviour. With this in mind, it is quite possible that most Member States will react to these developments by adopting protection, including trans-frontier control of new technologies and services.

Electronic protection (encryption), legal protection and security

Encryption is going to become increasingly im- in areas such as the integrity of signatures and portant in assuring the development of the pay text, irrevocable time and date-stamping and services. Encryption will ensure that only those international legal recognition. who pay will receive the service. It will also provide protection against personal data falling into the public domain. However, the ,increased use of encryption and International harmonization would assist the the development of a single encryption system market if it were to lead to a standard system of will increase the returns from hacking into the scrambling. Conditional access should ensure system to avoid payment or privacy restrictions. fair and open competition in the interests of Without a legal framework that would secure consumers and service providers. service providers against piracy of their encryption system, there is the risk that they will not get Encryption is particularly important for tele- involved in the development of these new ser- commerce, which requires absolute guarantees vices.

S. 2/94 Europe and the global information society

insufficient because communications reach beyond national frontiers and because the principles of the internal market prohibit measures such as import bans on decoding equipment.

On the other hand, governments may need pow- Therefore, a solution at the European level is ers to override encryption for the purposes eded which provides a global answer to the of encrypted signals and fighting against crime and protecting national problem of protection . security. security. Based on the principles of the internal market it would create parity of conditions for the protection of encrypted services as well as An answer given at a national level to this and to the legal framework for the development of the hacking issue will inevitably prove to be these new services.

Media ownership

In addition to ownership controls to prevent nal market and ensure effective rules which monopoly abuse, most countries have rules on protect pluralism and competition. media and cross media ownership to preserve pluralism and freedom of expression. Rules at the European level are going to be crucial, given the universality of the information society and its inherently transborder nature. The In practice, these rules are a patchwork Union will have to lead the way in heading off inconsistency which tend to distort and fragment deeper regulatory disparity. In so doing it will the market. They impede companies from taking reinforce the legal security that is vital for the advantage of the opportunities offered by the global competitiveness of Europe s media indus- , and internal market, especially in multimedia try. could put them in jeopardy vis-a.-vis non-Euro~ pean competitors.

In current circumstances, there is a risk of each Member State adopting purely national legislation in response to the new problems and challenges posed by the information society. Urgent attention has to be given to the question of how we can avoid such an undermining of the inter-

The role of competition policy

Competition policy is a key element in Union of a global, rather than a Union-wide, market strategy. It is especially important for consoli- should now be used in assessing European com- dating the single market and for attracting the petition issues such market power, joint ventures private capital necessary for the growth of the and alliances. trans-European information infrast):Ucture. The aim should not be to freeze any set of Areas of the information society are beset by regulations, but rather to establish procedures intense globalizing pressures. These affect both and policies through which the exploding dyna- European and non-European companies operat- mism of the sector can be translated into greater ing inside the Union. If appropriate, the notion opportunities for wealth and job creation.

S. 2/94 Europe and the global information society

Like other commercial players, companies involved in the supply of technologies and services must be in a position to adapt their strategies and to forge alliances to enable them to contribute to and to benefit from, overall growth in the sector in the framework of competition policy.

Technology The technological base in Europe today is suffi- usability and cost-effectiveness of the systems cient, to launch the applications proposed in this lIlust be improved, and the consequences of report without delay. They must focus on realis~ mass use further investigated. tic systems on a sufficient scale to explore the value of the services offered to the user, and to The research programmes of the Union and of evaluate the economic feasibility of the new Member States, in particular the Fourth Frame- information systems. work Programme, should be implemented in such a way as to take into account market However, new technologies do still have to be requirements. Technical targets and the timing of developed for their full-scale introduction fol- projects must be defined with appropriate user lowing these demonstrations. In particular, the involvement.

S. 2/94 Chapter 4: The building blocks of the information society

Communications systems combined with ad- information, basic services (e.g. electronic mail vanced information technologies are keys to the interactive video) which allow people to use the information society. The constraints of time and networks and applications (e.g. distance learn- distance have been removed by networks (e. ing, teleworking) which offer dedicated solu- telephone, satellites, cables) which carry the tions for user groups.

The opportunity for the Union strengthening its existing networks and accelerating the creation of new ones

ISDN: a first step Broadband: the path to

The traditional telephone network is changing its multimedia character. Having been built as a universal car- rier for voice, it now has to meet the communi- ISDN is only the first step. New multimedia cation requirements of a modem economy going services, for instance high-quality video commu- far beyond simple telephone calls. nications, require even more performance. ISDN is showing the way, and the next technological One important development is the integrated wave aims for the multimedia-world. This is service digital network ISDN. This offers the integrated broadband communications, provid- opportunity to send not only voice, but also data ing an opportunity to combine all media in a and even moving images through telephone flexible way. The lead technology to implement lines. this is called asynchronous transfer mode ISDN is particularly suited for the communica- (ATM). tions needs of small and medium-sized enter- European industry and telecoms operators are at prises. It permits, for example, direct PC to PC the forefront of these technological develop- communication, for the instant, low-cost trans- ments and should reap the benefits. mission of documents. Teleworking using ISDN Europe needs to develop an ATM broadband services can be attractive to a wide range of infrastructure as the backbone of the information businesses. ISDN is also an ideal support for society. Multimedia services offered through distance learning. these networks will support the work and leisure EURO-ISDN, based on common standards activities of all our citizens. started at the end of 1993. A number of European countries have a leading position which should In many European. countries, highly developed be exploited. broadband distribution already exists in the form of cable and satellite networks, or is being deployed. The application of currently available sophisticated digital techniques, such as picture compression and digital signal transmission, will easily enable these networks to fulfil mainstream demands for interactive individual information and leisure uses.

S. 2/94 Europe and the global information society

The present situation is mainly characterized by In Germany, the country where GSM is currently national and regional initiatives. The first trials having most success, about 30 000 new jobs of transnational networks have only recently have been created. On similar assumptions taken place. Europe-wide introduction on the same scale would generate more than 100 000 new jobs.

Satellites: widening the scope of communications

Satellites are mainly used for television broad- casting, Earth observation and telecommunications. The crucial advantage of satellites is their wide geographical coverage without the need for expensive terrestrial networKs. Satellites have many advantages for providing rural and remote areas with advanced communications.

Full exploitation of satellites can only be achieved by a new phase in the Union s satellite Mobile communication: policy. The objective should be to develop trans- European networks. a growing field

. Mobile communication is growing at breathtak- ing speed. The number of mobile telephone subscribers has doubled over the past three years to 8 million. At current growth rates of 30 to 40%, the Union will soon have 40 million users.

Europe is becoming an important leader in mobile communications through adoption around the world of its standards for digital communications. In particular, GSM is an excel- lent demonstration of how a common Europe- wide public/private initiative can be successfully transformed into a market driven, job-creating operation.

New basic services are needed

New basic services such as E-mail, file transfer Two basic elements are needed for such services: and interactive multimedia are needed. The nec- unambiguous standards and critical mass. The essary technology is available. New networks attraction of a telecommunications service de- are developing, such as ISDN, eliminating the pends directly on the number of other compat- present limitations of the telephone network. ible users. Thus, a new service cannot really take

S. 2/94 ......

Europe and the global information society off until a certain number of customers have subscribed to the service. Once this critical mass has been achieved, growth rates can increase dramatically, as in the case of Internet.

Internet is based on a world-wide network of networks that is not centrally planned. In fact nobody owns Internet. There are now some 20 million users in more than 100 countries. The network offers electronic mail, discussion fo~ rums, information exchange and much more. Internet is so big, and growing so fast, that it cannot be ignored. Nevertheless, it has flaws notably serious security problems. Rather than remaining merely clients, we in Europe should consider following the evolution of Internet Significant advantages for the whole economy closely, playing a more active role in the devel- could be realized quite quickly through exten- opment of interlinkages. sion of Europe-wide compatible basic services.

Blazing the trail ten applications to launch the information society

Today technology is in search of applications. At Demonstration function the same time, societies are searching for solutions to problems based on intelligent information. Initiatives taking the form of experimental ap~ plications are the most effective means of ad~ dressing the slow take-off of demand and supply. They have a demonstration function which Tariff reductions will facilitate the creation of would help to promote their wider use; they new .applications and so overcome the present provide an early test bed for suppliers to fine- low rate of capacity utilization. Voicelines oper- tune applications to customer requirements, and ate , an average of 20 minutes in 24 , for instance they can stimulate advanced users, still relatively hours, while some value-added network services few in number in Europe as compared to the US. are only working at 20% of capacity.

It is necessary to involve local, metropolitan and However, confident as we are of the necessity to regional administrations in their development. Cities can have an extremely important role in liberate market forces, heightened competition will not produce by itself, or will produce too generating early demand .and also in promoting slowly, the critical mass which has the power to an awareness among their citizens of the advan- drive investment in new networks and services. tages of the new services. In certain cases, local administrations could demonstrate the benefits by assuming the role of the first mass user. We can only create a virtuous circle of supply and demand if a significant number of market To be truly effective, such applications need to testing applications based on information net- be launched in real commercial environments works and services can be launched across preferably on a large scale. These initiatives are Europe to create critical mass. not pilot projects in the traditional sense. The

S. 2/94 Europe and the global information society first objective is to test the value to the user, and business and social applications. the second, the economic feasibility of the information systems. Priority applications should also contribute to a As the examples on the following pages demon- number of macroeconomic objectives: strate, it is possible to identify initiatives which will rapidly develop new applications and markets, while also having a positive impact on the strengthening industrial competitiveness and creation of new jobs and businesses. promoting the creation of new jobs

The private sector is ready to embark on the promoting new forms of work organization initiatives needed.

Priority applications can be divided into two improving quality of life and the quality of main blocks, according to final Users: the environment

D the personal home market (interactive and responding to social needs and raising the transaction applications related to teleshopping, efficiency and cost-effectiveness of public ser- telebanking, entertainment and leisure) vices.

S. 2/94 Europe and the global information society

Application one TELEWORKING More jobs, new jobs, for a mobile society

What should be done? Promote teleworking in employees, more flexible working arrangements homes and satellite offices so that commuters no will be particularly beneficial for all those tied to longer need to travel long distances to work. From the home, and for people in remote locations the there, they can connect electronically to whatever narrowing of distances will help cohesion. professional environment they need, irrespective of the system in use. Issues to watch? Problems arising from decreased opportunities for social contact and promotion will Who will do it? If the telecom operators make have to be .addressed. Impact on labour legislation available the required networks .at competitive and social security provision will need to be as- prices, the private sector will set up new service sessed. companies to supply teleworking support.

Who gains? Companies (both large and SMEs) and What target? Create pilot teleworking centres in public administrations will benefit from productiv- 20 cities by end 1995 involving at least 20000 ity gains, increased flexibility and cost savings. For workers. The aim is for 2% of white collar workers the general public, pollution levels, traffic conges- to be teleworkers by 1996; 10 million teleworking tion and energy consumption will be reduced. For jobs by the year 2000.

Application two DISTANCE LEARNING Lifelong learning for a changing society

What should be done? Promote distance learning Who gains? Industry (specially SMEs) and public centres providing courses, training and tuition ser- administrations, by cost reductions and optimiza~ vices tailored for SMEs, large companies and tion of the use of scarce training and education public administrations. Extend advanced distance resources. Employees needing to upgrade their learning techniques into schools and colleges. skills by taking advantage of lifelong learning programmes. People tied to the home and in remote locations. Students accessing higher quality teach- Who will do it? Given the required network tariffs ing. at competitive prices, industry will set up new service-provider companies to supply distance Issues to watch? Need to engage in a major effort learning services for vocational training. The Euro- to train the trainers qnd expand computer literacy pean Commission should support quality standards among the teaching profession. for programmes and courses and help create a favourable environment. Private sector providers What target? Pilot projects in at least 5 countries and public authorities will enter the distance edu~ by 1995. Distance learning in use by 10% of SMEs cation market, offering networked and CD-I and and public administrations by 1996. Awareness CD-ROM interactive disk based programming and campaigns among the professional associations and content at affordable prices. education authorities.

S. 2/94 Europe and the global information society

Application three A NETWORK FOR UNIVERSITIES AND RESEARCH CENTRES Networking Europe s brainpowe.

What should be done? Development ofa trans- Who gains? The productivity of research pro- European advanced network (high bandwidth, high grammes through broader team creation leading to definition, carrying interactive multiinedia ser- synergies between institutions. Society in general vices) linking universities and research centres through more efficient diffusion of research find- across Europe, with open access to their libraries. ings and knowledge. Issues to watch? Giving due consideration to IPR protection as the accumulated stock of human Who will do it? Providing broadband networks .and knowledge becomes more readily accessible. high speed lines are available at competitive rates universities and research centres will set up the What target? Thirty per cent of European univer- networks. Private companies, large and small sities and research centres linked through advanced could also link their laboratories with universities communications networks by 1997. Extension to and research centres. A trans-European public other European countries as this becomes techno- library network can also be envisaged. logically feasible.

Application four TELEMATIC SERVICES FOR SMEs Relaunching. amain engine for growth and employment in Europe

What should be done? Promote the widest pos- networks at local and regional level, promoting sible use of telematic services (E-mail), file trans- awareness campaigns for the services available. fer, EDI, video conferencing, distance learning, Who gains? SMEs will be able to compete on a etc.) by European SMEs, with links to public authorities, trade associations, customers and sup- more equal basis with larger companies and captive pliers. Raise the awareness of value-added services, contractor-supplier relationships will be weakened. , will grow faster and and communications in general, among SMEs. They will be more competitive Increase access to trans-European data networks. create more jobs. Relationships with administrations will be simpler and more productive. The category will gain in public standing and influence. Who will do it? If the necessary ISDN networks are available at competitive rates, the private sector What target? Access to trans-European telematic will provide trans-European value-added services services for SMEs available by end 1994-95. In all tailored for SMEs. Local government, chambers of 40% ofSMEs (firms with more than 50 employees) commerce and trades associations linking SMEs using telematic networks by 1996. SME links with will mount programmes for integrating information administration networks prioritized.

S. 2/94 Europe and the global information society

Application five

ROAD TRAFFIC MANAGEMENT Electronic roads for better quality of life

What should be done? Establish telematic solu- Who gains? Drivers, local communities (especiallY tions on a European scale for advanced road traffic in heavily congested areas) and industry will ben- management systems and other transport services efit from reduction in traffic, increased road safety, (driver information, route guidance, fleet lllana.ge- lower environmental costs, energy and time saving. ment, road pricing, etc.

Who will do it? European, national and regional What target? Implementation of telematic systems administrations, user groups and traffic operators for road traffic managelllent in 10 metropolitan will create a steering committee and define a areas and 2000 km of motorway by 1996. Imple- common open-system architecture for advanced mentation in 30 metropolitan areas and the trans- telematic services with common user interfaces. European motorway network by the year 2000.

Application six AIR TRAFFIC CONTROL An electronic airway for Europe

What should be done? Create a European air from better air traffic management and significantly traffic communication system providing ground to reduced energy consumption. A safer system, with ground connections between all European air traffic less congestion and subsequent reductions in time control centres (ATe) and air to ground connec- wasted, noise and fume pollution. tions between aeroplanes, ATC-centres across the There is a need to coordinate European Union and the European civil aviation Issues to watch? conference, with the aim of achieving a unified closely with the defence sector. trans-European air traffic control system. What target? Set up a steering committee with representatives of public authorities, civil and mili- Who will do it? The European Council should tary aviation authorities, the air transport industry promote energetically the creation of a reduced and unions by end 1994. Definition of standards for number of networked European air traffic centres communication procedures and the exchange of as defined by Eurocontrol. data and voice messages between PJC-centres as well as between PJC-centres and aeroplanes. A Who gains? The European air transport industry functioning trans-European system before the year and its millions of passengers will benefit 2000.

S. 2/94 Europe and the global information society

Application seven HEALTHCARE NETWORKS Less costly and more effective healthcare systems for Europe s citizens

What should be done? Create a direct communi- ment in diagnosis through on-line access to Euro- cation ' network of networks' based On common pean specialist$, on-line reservation of analysis and standards linking general practitioners, hospitals hospital services by practitioners extended on Eu- and social centres on a European scale. ropean scale, transplant matching, etc.). Taxpayers and public administrations will benefit from tighter Who will do it? The private sector, insurance cost control and cost savings in healthcare spending companies medical associations and Member State and a speeding up of reimbursement procedures. healthcare systems, with the European Union promoting standards and portable applications. Once Issues to watch? Privacy and the confidentiality telecom operators make available the required net- medical records will need to be safeguarded. works .at reduced rates, the private sector will create competitively priced services at a European level boosting the productivity and cost effectiveness of What target? Major private sector health care the whole healthcare sector. providers linked on a European scale. First-level implementation of networks in Member States Who gains? Citizens as patients will benefit from a linking general practitioners, specialists and hospi- substantial improvement in healthcare (improve- tals at a regional and national level by end 1995.

Application eight ELECTRONIC TENDERING More effective administration at a lower cost

What should be done? Introduction of electronic electronic handling and from the more competitive procedures for public procurement between public environment between suppliers drawn from the administrations and suppliers in Europe followed wider internal market. Small and medium-sized by the creation of a European electronic tendering enterprises will benefit from participating in trans- network. This programme will function as a strong European public procurement and from the diffu- enabling mechanism for attaining critical mass in sion of telematic services. the telematic services market in Europe. Issues to watch? Data security, the need to ensure Who will do it? European Council and Member open access particularly for SMEs, to avoid elec- States decide to agree on common standards and to tronic procurement developing into a hidden form int~oduce a mandatory commitment to electronic of protectionism. Take proper account of similar handling of information, bidding and payments programmes developed in third countries, particu- related to public procurement. Telecom operators larly the US (CALS). and service providers will enable users to access to the European electronic tendering network: What target? A critical mass of 10% of awarding authorities using electronic procedures for their Who gains? Public administrations will benefit procurement needs could be attained in the next from cost savings in replacing paper handling with two to three years.

S. 2/94 Europe and the global information society

Application nine TRANS..EUROPEAN PUBLIC ADMINISTRATION NETWORK

Better government, cheaper government

What should be doue? Interconnected networks solutions for the provision of interoperable services between public administrations networks in and interconnectable networks, while supporting Europe, aiming at providing an effective and less national and local authorities in the testing and expensive (replacement of paper by electronic implementation of networks and services for citi- means) information interchange. Subsequently ex- zens. tended to link public administrations and European Who gains? The unification citizens. process for the single market, with general benefits in lower costs and Who will do it? European Union and Member better relations between public administrations and States should strengthen and speed up the imple- European citizens. mentation of the programme for interchange of data What target? Implementation of interconnected between administrations (IDA). The private sector networks allowing interchange in the tax, customs will increase its cooperation with the European and excise, statistical, social security, health care Union and Member States in defining technical domains, etc., by 1995-96.

Application ten CITYINFORMA TION HIGHWAYS Bringing the information society into the home

What should be doue? Set up networks providing preferences in the fields of entertainment (video on households with a network access system and the demand), transaction-oriented services (banking, means of using on-line multimedia and entertain- home shopping etc.) as well as gaining access to ment services on a local, regional, national and information services and teleworking Or telelearning. international basis. Public authorities will gain experience with issues Who will do it? such as privacy, IPR protection and standardization Groups of content and service which will be helpful in defining a single legal and providers (broadcasters , publishers), network op- regulatory environment. erators (telecoms organizations, cable), system suppliers/integrators (e.g. consumer electronic in- Private sector participants will gain early hands-on dustry). Local and regional authorities, citizens experience of consumer preferences for pro- groups and chambers of commerce and industry, grammes, software and services. User interfaces will have very important roles to play. can be tested and improved in practice. Who gains? Consumers will enjoy early experi- What target? Install and operate in up to five ence of complex new services, particulary multi- European cities with up to 40 000 households per media services, and will be able to express their city by 1997.

S. 2/94 Chapter 5: Financing the information society task for the private sector

It is neither possible nor necessary at this stage expenditure. Indeed, some of the investment that to be precise about the amount of investment that public authorities will have to undertake to will be generated by the development of the develop applications in areas of their own re- information infrastructure and related services sponsibility will generate productivity gains and and applications. Analyses made of the US an improvement in the quality of services that market remain highly questionable, although should, if properly handled, lead to savings. there is no doubt that the total investment required over the next 5 to 10 years will be In addition to some refocusing of expenditure on considerable. R&D, modest amounts of public money may also be useful to support awareness campaigns The group believes the creation of the informa- mainly directed at small and medium-sized busi- tion society in Europe should be entrusted to nesses and individual consumers. the private sector and to market forces.

Private capital will be available to fund new telecoms services and infrastructures providing that the different elements of this report's action plan are implemented so that:

market liberalization is fast and credible rules for interoperability and reciprocal access are set tariffs are adjusted the regulatory framework is established.

There will be no need for public subsidies The same is true for expenditure at the European because sufficient confidence will have been Union which can achieve important results by a established to attract the required investment better focusing of existing resources, including from private sources. finance available under both the Fourth Frame- work Programme funding R&D, and under the Ultimately, it is market growth that is perceived Structural Funds. as the real guarantee for private investors, ren- dering subsidies and monopolies superfluous. The Commission has also proposed limited support for some of the services and applications Public investment will assume a role, but not by included in the group s action plan from funds any increase in the general level of public linked to the promotion of trans-European net- spending rather by a refocusing of existing works. These proposals deserve support.

S. 2/94 Europe and the global information society Chapter 6: Follow-up

With this report the group has completed its mandate and provided recommendations for action. Our recommendations should be regarded as a coherent whole, the full benefits of which can only be reaped if action is taken in all areas.

S. 2/94 An action plan summary of recommendations

S. 2/94 Europe and the global information society

S. 2/94 Extracts of the conclusions of the Presidency of the Corfu European Council (24 and 25 June 1994) Wh ite P ape r

In December 1993 the European Council in The European Council on the basis of a report Brussels adopted a plan of action based on the from the President of the Commission had an in Commission White Paper on a medium-term depth discussion on the different elements of the strategy for growth, competitiveness and em- Action Plan decided in the Brussels European ployment. It underlined that a healthy and open Council. economy as well as an economy geared to solidarity were essential prerequisites for the successful implementation of this plan. The European Council puts particular emphasis on the following points which should give new impetus in the follow-up debate on the White Signs of economic recovery are now being Paper. confirmed and non~inflationary economic growth is returning. The European Council considers it essential that the improvement in the (i) Encouragement of reforms in Member economic situation should not lead to a slacken- States intended to improve the efficiency ing of efforts to promotes.tructural adjustment in of the systems of employment. Europe but should instead be exploited to speed up essential reforms, particularly in the field of Specific measures with regard to fully employment, where the situation is still very (ii) worrying. exploiting the employment potential of small and medium-sized enterprises. The successful conclusion of the Uruguay Round within the guidelines set out by the (iii) Reinforced coordination research European Council has created an international policy. trade policy environment which can provide effective support for economic recovery and job creation. The European Council calls on the (iv) Rapid implementation of high priority Community institutions and Member States to trans-European projects in tlw field of do everything necessary to complete ratification transport and energy. in time to ensure the entry into force before 1 January 1995. The European Union will play an (v) Fully exploiting the possibilities and op- active role in efforts to ensure that the new portunities offered by the information so- World Trade Organization can effectively carry ciety. out its task of ensuring observance of the rules drawn up jointly and promote progress in com- bating unfair trade conditions. Environmental (vi) Encouragement of the new model of sus- and social issues will also have to be discussed tainable development including the envi- in this context. ronmental dimension.

1. Improving the employment situation

A sound macroeconomic environment is a sine ment, which requires structural reforms both at qua non for success in the fight against unem- the level of Member States and of the Union. ployment (see point 5). The European Council considers that increases in productivity for the rest of this century should The resumption of economic growth will not of be dedicated primarily to investments and jobs. itself suffice to settle the problem of unemploy- This objective should be implemented in a spirit

S. 2/94 127 Extracts of the conclusions of the Presidency of the Corfu European Council of solidarity and taking special account of those obstacles to part-time work and in general to in society who are in the weakest position. The promote new forms of organization of work. European Council stresses the need to maximize the potential of human resources. with regard to developing new employment in connection with meeting new requirements The European Council reviewed, on the basis of linked to the quality of life and protection of the a report from the Commission, the initiatives environment, the European Council notes that a under way in the Member States in accordance number of initiatives have been taken but many with the general objectives defined in December of the new areas of job growth that were identi- 1993. The European Council noted progress in fied in the White Paper remain to be exploited. these areas but considered that the efforts under- The European Council underlines the impor- taken so far, though appreciable, still fall a long tance of the study to be prepared by the Com- way short of what is necessary. It encourages mission before the next European Council on Member States in order to win the battle for jobs this subject. to take further steps to implement the objectives set out in December. In particular: D with regard to young people, the European Council considers that additional emphasis with regard to education and training, the should be given to those young people who are European Council concurs with the Commis- facing the greatest difficulties. It attaches high s recommendation that a more systematic sion importance to ensuring as far as possible that and comprehensive approach will be needed in young people can move from education into many Member States, in particular with regard to work; in this context it welcomes the Commis- continuing training. At the Community level the sion s Youthstart programme. European Council welcomes the agreement in principle by the Council on the two new education and training programmes (Leonardo and Socrates) and invites the Council and the Euro- To support these efforts the European Council pean Parliament to finalize the decisions on this invites the Social Affairs Council, the Ecofin programme before the end of the year. Council and the Commission, on the basis of information collected by the Commission, to keep progress in this area under constant review. as regards measures to encourage employ- The Council will report to the European Council ment, the European Council notes the Commis- in Essen on national experiences which have had sion recommendation concerning the reduction positive effects on employment, analysing the , and define appropriate of non-wage labour costs, mainly on the less reasons for their success skilled. In this framework, the European Council policy recommendations for adapting current underlines that further steps should be pursued policies. consistent with the objective of budgetary con- solidation. Efforts to promote youth employment and to combat long-term unemployment should be Accordingly, the European Council takes note of given particular priority in the work of the the discussion on the CO /energy tax issues and Council. underlines the need to ensure that environmental costs are better reflected throughout the economy. Finally the European Council invites the Com- mission to renew its efforts towards assuring the necessary social dialogue, making full use of the as regards the promotion of economically new possibilities available in the Treaty on sound formulas for the organization of work, the European Union and in particular of the provi- European Council notes the need to remove sions of the protocol annexed to it.

128 S. 2/94 Extracts of the conclusions of the Presidency of the Corfu European Council

2. The internal market, competitiveness and sma.Il and medium-sized enterprises

The smooth operation of the internal market is tation by the Council of its orientations concern- essential if the economy is to be competitive and ing interest rate subsidies for SMEs and that the dynamic. This means that the delays in transpos- Commission has decided to devote ECU 1 bil- ing certain important Directives on public con~ lion for the period 1994-99 for a Community tracts, insurance, intellectual property and com~ initiative programme to help small and medium- pany law at national level must be remedied. sized enterprises adapt to the internal market and Furthermore, it is essential that the basic prin~ to the new competitive environment. It also ciples of the single market should be extended to noted with interest the recent Commission ini- those areas, such as energy and telecommunica- tiative for an integrated programme in favour of tions, which are still only partly covered by it small and medium-sized enterprises, including while ensuring that the public service and town action to simplify legislation and reduce admin- and country requirements in these sectors are istrative burdens on such enterprises, and the also safeguarded. initiative of the Portuguese Prime Minister on the local dimension of the internal market and the initiatives taken by Ireland in the areas of The single market is implemented with due social partnership and local development. The regard to environmental problems. The safe- European Council considers that local develop- guard of important national environmental pro~ ment initiatives offer considerable potential for tection measures shall be secured in this context. reinforcing the economic and social fabric of the European Union and for creating jobs. They are The single market is a fundamental aspect of an essential element of the new model of devel- Community construction but it is not an end in opment mentioned in the White Paper and will itself, as was already pointed out in the conclu- help to preserve cultural diversity within the sions of the Rhodes European Council in 1988. Union. The European Council notes the Com- It should be used to serve the welfare of all, in mission s intention, within the framework of the accordance with the tradition of social progress report on new potential sources of employment established in the history of Europe. The policy to be submitted to the European Council of the Union, alongside the policies of the Essen, to draw up a detailed inventory of the Member States, should foster the affirmation of various actions at Community level to foster this social dimension. In the view of the Member local development and local employment initia- States concerned, the recent agreement in the tives, particularly those concerning microenter- Council under the provisions of the Social Pro- prises and handicraft industries. This inventory tocol concerning information and consultation of will be accompanied by the proposals deemed workers in multinational enterprises constitutes necessary to enhance the consistency and the significant progress towards the realization of effectiveness of those actions. this objective. Further advances on the same basis, including efforts aimed at avoiding social exclusion, are essential in a society in rapid Regarding scientific and technological research transformation. The European Council also wel- the European Council expects that the recent comed the recent agreements in the Council on decision on the ambitious 1994-99 framework the protection of young workers as well as the programme, to which considerable funding has creation of the agency for health and safety at been allocated, will be followed up without work. delay by the rapid adoption of specific sector programmes. In this context the information sector and biotechnology are of particular impor- Small and medium-sized enterprises make a tance. It also invites the Council to pursue a major contribution to growth and job creation more systematic coordination of Community and and they should be able to benefit more from all national research policies and invites the Com- the opportunities offered by the single market. mission to take any useful initiatives to promote The European Council welcomed the imp lemen- such coordination.

S. 2/94 129 Extracts of the conclusions of the Presidency of the Corfu European Council

Lastly, the European Council expressed its con- ment and competitiveness. With regard to these viction that the elimination of unnecessary legal latter aspects the European Council welcomes and administrative burdens on business and the establishment by the Commission of a group making Community and national legislation sim- composed of independent persons to assist it in pler are important aspects of improving the this task and attaches high importance to its competitiveness of the European economy. It work. welcomes the fact that the Commission is pur- suing its efforts to simplify existing Community legislation and will reinforce its cost/benefit As regards subsidiarity the Council welcomes examination of proposed Comn:mnity legisla- the progress made so far by the Commission in tion. The Commission also intends to launch a acting on the report of December 1993 and notes process of examining the impact of existing the Commission s undertaking to give a full Community and national legislation on employ- report to Essen.

3. Trans-European networks for transport, energy and environmental projects

The single market will produce all the expected The European Council calls on the Christo- positive effects to benefit citizens and firms only phersen group together with the representatives if it can rely on effective , trans-European net- of the acceding States to continue their work on works for transport and energy. The European the basis of the mandate proposed in the group Council welcomed the work achieved so far by report studying further the extension of the the group chaired by Mr Christophersen in trans-European networks to neighbouring coun~ accordance with the mandate given last Decem- tries (in particular to Central and East European ber. countries and to the Mediterranean Basin) and to prepare a final report to the European Council in Essen. It also asks the Christophersen group to On the basis of the group s report, the European examine the question of relevant networks in the Council has agreed on a first priority list of field of the environment. major transport projects, set out in Annex I. As far as the energy sector is concerned the Euro- pean Council took note of the projects listed in As regards financing of networks, the European Annex II and requested the Christophersen Council confirms that measures will be taken, if group to continue its work examining in particu- proved necessary, in order that priority projects lar their economic viability. The Member States do not run into financial obstacles which would involved are asked to make every effort to jeopardize their implementation. .It noted the ensure that all the transport projects whose conclusions of the Ecofin Council and the stud- preparation is sufficiently advanced are started ies carried out by the Commission. This question up immediately and that the others are started up will continue to be examined by the Christo- as far as possible during 1996 at the latest by phersen group and in the Ecofin Council until accelerating administrative, regulatory and legal the Essen European Council, taking account of procedures. The European Council invites the the specific cha~acteristics of each project, the Commission to take all useful initiatives in this leading role of private funding and the judicious respect including the convening, where appro- use of existing Community resources. priate, of project seminars aimed at coordinating the activities of all parties involved. The Council will be informed if it appears that the achievement of certain projects is threatened The European Council also attaches importance for financial reasons linked to insufficient prof- to the other important transport projects which itability for example because of the length of are set out in the interim report. investments or environmental constraints. The

130 S. 2/94 Extracts of the conclusions of the Presidency of the Corfu European Council

Council will immediately consider with the sponses, within the limits set by the financial Commission and the EIB the appropriate re- perspectives.

4. The information society

The European Council took note of the report ways). The importance of linguistic and cultural from the group of leading figures representing aspects of the information society was also the industry, operators and users who have been stressed by the European Council. examining the various aspects of this question under the chairmanship of Mr Bangemann. The The European Council, having noted the find- European Council considers that the current ings of the Bangemann group, considers that the unprecedented technological revolution in the importance and complexity of the issues raised area of information opens up vast possibilities by the new information society justify the setting for economic progress, employment and the up of a permanent coordination instrument to quality of life, while simultaneously represent- ensure that the various parties involved, both ing a major challenge. It is primarily up to the public and private, are working along the same private sector to respond to this challenge, by lines. This coordination instrument, to be set up evaluating what is at stake and taking the nec- as soon as possible, should be based on the essary initiatives, notably in the matter of financ- appointment in each Member States of a person ing. The European Council, like the Commis- responsible at ministerial level for coordinating sion, considers that the Community and its all aspects of the subject (political, financial and Member States do however have an important regulatory) with a view inter alia to ensuring a role to play in backing up this development by coordinated approach in the Council. The Com- giving political impetus, creating a clear and mission will act similarly. stable regulatory framework (notably as regards At the level of the Community, the necessary access to markets, compatibility between net- regulatory framework has to be established as works, intellectual property rights, data protec- soon as possible. The European Council invites tion and copyright) and by setting an example in the Council and the European Pa,rliament to areas which come under their aegis. The Euro- adopt before the end of the yea~measures in the pean Council agreed in general with the areas of areas already covered by ~Isting proposals. It application set out by the group (teleworking, also invites the Commi~sion to establish as soon distance learning, network for universities and as possible a programme covering the remaining research centres, telematic services for SMEs measures needed at the Community level. road traffic management, air traffic control health care networks, electronic tendering, ad- The European Council will assess progress at its ministrative networks and city information high- meeting in Essen.

5. The macroeconomic environment

Regarding major economic trends, the European creating a sound basis for future growth and Council notes first of all that the Member States favouring the convergence of economies to- have broadly followed the guidelines laid down wards the criteria laid down in the Maastricht by the European Council in December 1993. Treaty for the final stage of EMU. These efforts Inflation, which is in the process of being must be continued in order to consolidate the overcome, a return to exchange rate stability and fall in short-term interest rates and to reverse an incipient reduction of public deficits are the recent upward trend of long-term interest

S. 2/94 131 Extracts of the conclusions of the Presidency of the Corfu European Council rates, all of which are essential conditions for Council in accordance with Article 103 of the stimulating investment and creating jobs. EC Treaty. It invites the Council to finalize the guidelines in the light of the conclusions of this For all these reasons the European Council European Council with regard to the implemen- endorses the economic policy guidelines con- tation of the White Paper in general. tained in the report submitted by the Ecofin

132 S. 2/94 Extracts of the conclusions of the Presidency of the Corfu European Council

Annex I List of high priority transport projects

adopted by the European Council

Projects Countries involved

High-speed train combined transport north-south 1/ AID Brenner axis Verona Munich Nuremberg Erfurt HallelLeipzig Berlin

High-speed train Paris Brussels- Cologne - Amsterdam London The following sections of the project are included Belgium: FIB border Brussels Liege BID border Brussels - B/NL border United Kingdom: London Channel Tunnel Access Netherlands: B/NL border Rotterdam- Amsterdam Germany: Aachen Cologne Rhine/Main

High-speed train south Madrid Barcelona Perpignan Montpellier ElF Madrid Vitoria - Dax ElF

High-speed train east

The following sections of the project are included2 Paris Metz Strasbourg - Appenweier Karlsruhe FID with junctions to Metz Saarbrucken Mannheim FID and Metz Luxembourg FIL

Betuwe line: Combined transport/conventional rail NLID Rotterdam - NLID border Rhine/Ruhr1

High-speed train/combined transport France Italy F!I Lyons Turin

Motorway Patras Greek/Bulgarian border/ jointly with the west-east motorway corridor: Via Egnatia Igoumenitsa Thessaloniki Alcxandroupolis Ormenio/ Kipi

1 Ongoing construction support already provided at Community level. 2 The extension to Frankfurt is already under construction; as regards the further extension to Berlin the maturity of the project is not advanced enough.

S. 2/94 133 * * *

Extracts of the conclusions of the Presidency of the Corfu European Council

Motorway Lisbon Valladolid PIE

Cork Dublin Belfast Lame Stranraer rail link IRLIUK

Malpensa airport (Milan)

Fixed rail/road link between Denmark and Sweden (~resund fixed link) DKiS including access routes

Annex II

List of energy projects which the European Council has given priority status

France Italy: electricity interconnection

Italy Greece: electricity interconnection (cable)

Denmark: east-west electricity connection (cable) (not eligible for Structural Funds)

Portugal: natural gas network

Greece: natural gas network

Spain Portugal: natural gas interconnections

Spain Portugal: electricity interconnections

Algeria Morocco European Union: gas pipeline

Russia Belarus - Poland European Union: gas pipeline

1 Including the introduction of natural gas in the Extremadura and Galicia regions of Spain. 2 This project should also be shortlisted and studied although it has not yet reached the same stage as the other four gas schemes.

134 S. 2/94 European Commission

Growth, competitiveness and employment White Paper follow-up

Report on Europe and the global information society

Interim report on trans-European networks

Progress report on employment

Extracts of the conclusions of the Presidency of the Corfu European Council

Supplement 2/94 Bull. EU

Luxembourg: Office for Official Publications of the" European Communities

1994 - 134 pp. - 17.6 x 25.0 cm

ISBN 92-826-8547-

Price (excluding VAT) in Luxembourg: ECU 7