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ENPress ServiceDirectorate for the MediaDirector - Spokesperson : Jaume DUCH GUILLOTReference No.: 20110207FCS13232Press switchboard number (32-2) 28 33000 1/22

Strasbourg plenary session 14-17 February2011

• Rights for bus travellers• Europe's pension system under scrutiny• Croatia's EU aspirations to be debated

More information for bus travellers and protecting patients from counterfeit drugs arejust two of the items on the agenda when the European Parliament meets in Stras-bourg, France on 14-17 February. The week will also vote on new CO2 limits for com-mercial vans and a resolution on Europe's pension system will be put to the voteTuesday. Croatia's EU aspirations will also be debated by the House.

The week also sees a vital EU-South Korea trade agreement being put to the vote. Thedeal is the largest ever conducted by the European Union with another country. Membersof the European Parliament have strongly backed "safeguard clauses" in the agreementthat will protect European industries and jobs.

You can follow all the news and watch the sitting live from Monday at 1700 CET. This fo-cus will be updated daily.

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20110207FCS13232 - 2/22

Newsletter - 14-17 February 2011 - Strasbourg plenary session

• Passenger rights for bus and coach travellers• Protecting patients from counterfeit drugs

Passenger rights for bus and coach travellers

Bus operators and terminals throughout the European Union will soon have to offer theirpassengers better information, assistance and compensation for delays, thanks to MEPs.Protecting patients from counterfeit drugs

Internet sales of medicines are set to be covered by a new EU law designed to preventcounterfeit drugs from entering the legal supply chain.On the road to greener vans

Parliament will take a step towards introducing cleaner, more fuel-efficient vans on Tuesday,when it votes on CO2 limits for new vans in the EU.Sustainable pension systems

Pension reforms are under way across Europe, in response to the EU's ageing populationand the economic downturn. Sustainability of systems and adequate retirement income mustbe maintained, according to a resolution to be put to the vote by MEPs on Tuesday.Croatia: the next EU Member State?

Croatia's EU membership negotiations could be completed in the first half of 2011 providedZagreb pushes ahead with reform, according to a draft resolution by the Foreign AffairsCommittee that comes before Parliament on Wednesday.Parliament to debate unrest in Egypt MEPs will hold another debate on the current politicalsituation in Egypt, after having debated the political protests in the southern Mediterraneanon 2 February. A resolution will be put to the vote on Thursday.Hungarian media law under the spotlight

Hungary's new media law will be debated at the European Parliament on Wednesday. TheCommission has asked the Hungarian government to clarify certain aspects of the law, whichentered into force on 1 January this year. A resolution will be put to the vote on Thursday.

Other items on the agendaEU's free trade accord with South Korea nears the finishing lineMEPs to vote on patent procedure limited to EU states that wish to opt inImmigration: a single permit to live and work in the EUDebate on treaty change with Commission PresidentEU asylum systemMEPs seek to fine-tune macro-regional approach of Danube StrategyEU firms have yet to reap full benefits of Services DirectiveRising world food prices: what Europe should doBrazil: visa-free stays for EU citizensEurope 2020: debate on economic reformBacking for EIB to help it achieve environment and development goalsHuman rights and democracy resolutions

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"Charter of rights" (& compensation) closer for Europe's bus andcoach passengers

• Europe's bus and coach passengers could soon be entitled to refreshments,compensation and even hotel accommodation if their journeys are delayed

• European Parliament debates and votes on Charter of Rights Tuesday 15 February• Interview with rapporteur - Italian MEP Antonio Cancian (EPP)

Europe's 70 million bus and coach passengers could soon be entitled to refreshments,compensation and even hotel accommodation if their journeys are delayed under rulesbeing considered by the European Parliament. For example if a journey is over threehours is delayed for more than 90 minutes then meals and even a hotel room could be of-fered. MEPs discuss and vote on the new EU-wide Regulation Tuesday.

Ahead of the debate we interviewed the man who has drafted Parliament's report on theissue - Italian MEP Antonio Cancian (EPP).

The European Commission proposed this regulation way back in 2008 - why is theprocess still ongoing?

AC: Buses and coaches are not usually managed by big companies like air or train compa-nies, but often by family businesses. EU governments argued it was not the right momentto impose new rules for Small and Medium size Enterprises (SMEs) to avoid affecting theircompetitiveness. This is understandable, but we have to take into account that bus passen-gers are often "vulnerable" in terms of income or education. They can't solve their problemsby going to Court. Then we have people with reduced mobility, not only disabled but also anincreasingly older population. Therefore, a common set of rules was absolutely necessary.

What will change for European bus and coach passengers?

AC: All of them will have a charter of rights. Furthermore, on services over 250 kilometres(155 miles), they will have compensation for delays, assistance in the event of delays orcancellation. They will also have protection for accidents and fatalities, reimbursement forlost or damaged luggage and accessible information. Moreover, passengers who have re-duced mobility will be entitled to special assistance, as on planes.

What were the main points of disagreement with European governments?

AC: We wanted the rules to apply for services over 50 km and they wanted it only for servicesover 500 km so 250 km was a compromise. It was very hard to find an agreement. The lastnight of negotiations we finished at 1.30 am. It was the first conciliation act after the LisbonTreaty. It was a fiery debate.

We are speaking about passengers rights on long distance services, but what aboutshorter distances?

AC: The regulation provides a series of 12 basic rights - valid for every distance - focusedin particular on the needs of disabled persons and persons with reduced mobility.

What's next?

AC: With this regulation we have completed the dossier on passengers' rights. No matterwhich mode of transport people use, now they are protected at EU level.

The European Commission has committed itself to revise in the coming years all the currentregulations for all modes of transports under a common framework. This would make iteasier for passengers to be aware of their rights and reduce the number of authorities thathave to monitor the implementation. We will also ask for a single ticket for all modes oftransport. So that we are not going to become mad if we have to take a bus and then atrain in the same trip!

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Charter for bus and coach passengers• Compensation and assistance in the event of accidents and accommodation of up to €80 per

night and per passenger for a maximum of 2 nights• If a bus or coach is cancelled or delayed for more than 120 minutes or overbooked, passengers

shall immediately be offered the choice between continuation of the journey or re-routing• Where a journey of more than 3 hours is cancelled or delayed for more than 90 minutes, snacks,

meals or refreshments must be provided as well as hotel accommodation of up to €80 per night,per person

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20110207FCS13232 - 5/22

Pressing the Services directive into action

• Monday afternoon. MEPs debate report on Services Directive• Activities covered by the Services Directive account for 40% of EU GDP and jobs

Monday afternoon sees the European Parliament debate the implementation of the Servicesdirective. The directive was one of the most important pieces of legislation adopted by theEuropean Parliament as it would allow one service provider to operate in another Europeancountry. The House will vote Tuesday (15 February) on the report.

For example under the Services directive German ski instructors should be able to givelessons in Austria and Latvian transport companies operate in Belgium. However, for manyof them it has not been the case, even if the Services directive had entered in force, theimplementation has been only partial and poorly achieved by many countries.

The report is Parliament's first assessment on the state of play of implementation, focusingon main issues raised in the Member states: the scope of the directive, the points of singlecontact, the administrative cooperation and mutual evaluation process.

It's not usual that Parliament does a report on the implementation of a directive. "We workedon this very important piece of legislation for years and now we want it to be put in placecorrectly; we realised that in some countries there was a considerable delay," explainedEvelyne Gebhardt, the German Socialist EP who guided the measure through Parliament in2006.

She went on to sat that "so still for a certain time, there was a requirement that tourist guidein Rome to be Roman and a German ski instructor wasn't able to instruct in Austria becausehe was asked a paper from his bank that didn't even exist in Germany," she added.

Many stops and no shops?

One of the most serious delays concern one-stop-shops called 'Points of Single Con-tact' (PSC), foreseen in the Services directive, where any person wishing to provide servicesin another country could obtain the necessary information: this quintessential tool to facilitatethe cross-border service provision has been either poorly or not at all established.

The report points out that PSC should be provided with financial means to ensure the avail-ability and the quality of information, and there's also a question of languages: "The infor-mation can't be just in the language of the country; it should absolutely be provided in sev-eral languages, namely in areas close to borders, and in English of course," insists Ms Geb-hardt. Also, she points out, particularly as PSC shouldn't be just a portal or electronic form,but there should be a human contact involved in order to provide to users comprehensiveanswers to their questions.

She insists on keeping the pressure on Member States in order to achieve full transposition:"After all it's also the Member States that wanted this Directive. It's a real pity it's not being putin place." Even more so because, as the report says, the activities covered by the ServicesDirective account for 40% of EU Gross Domestic Product and jobs and are therefore couldbe crucial for economic growth and employment.

The report and the debates in the Parliament's Internal Market Committee also focusedon the scope of the directive and the uncertainty regarding some services area excludedfrom the directive, especially social services, healthcare services and services of generaleconomic interest.

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Opening of the session: Egypt, child soldiers, executions in Iran

• Egypt, Buzek spoke of "a new wind blowing" through the country• President condemns "shocking news from Iran" of death sentences passed on

dissidents and political prisoners

At the start of this week's Strasbourg plenary session, EP President Jerzy Buzek commentedon the popular uprising in Egypt, the fresh arrival on European shores of refugees from northAfrica, International Day against Child Soldiers and the recent death sentences passed ondissidents in Iran.

On Egypt, the President spoke of "a new wind blowing" through the country. He said peace-ful demonstrators should not be persecuted and emergency rule should be ended. The Eu-ropean Union must "not be afraid to be involved economically and politically", he continued,adding "let us help our neighbours" and "act in solidarity as a true community".

As a result of the upheaval in north Africa, significant numbers of immigrants are arriving inthe EU. "The EU Member States must share this responsibility", argued Mr Buzek.

International Day against Child Soldiers took place on 12 February. "We as a parliamentabhor the practice" of recruiting child soldiers, said the EP President, pointing out that thereare between 200,000 and 300,000 such children in armed groups around the world.

The "shocking news from Iran" of death sentences passed on dissidents and political pris-oners was the final issue highlighted by Mr Buzek. In the name of Parliament, he urged Iranto abolish capital punishment.

Agenda changes: debates on Russia and refugees from north Africa

The House approved two changes to this week's plenary agenda.

At the request of the ALDE and Greens/EFA groups, a debate on the rule of law in Russiawas added to Tuesday morning's agenda. A resolution will be put to the vote on Thursday.

At the request of the EPP group, Tuesday afternoon's agenda will now include a Commis-sion statement with debate on immediate EU measures in support of Italy and other statesaffected by the current increase in migratory flows.

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MEPs combat killer fake medicines

• Internet sales a real concern• Some MEPs want EU norms applied outside Europe

Viagra, cancer drugs, anti-malaria pills and painkillers - more and more people buy medicineon the internet, but it's often counterfeit.

During the February Parliamentary session MEPs will debate (15 February) and vote (16February) on new safety rules for medicine in general, including internet sales, to reducethe number of fake medicines in the European Union.

In November and December 2008 customs officials seized more than 34 million illegal pillsacross the EU. Faking medicines is high-profit, low risk crime and it is not sufficiently regu-lated at European level.

It is estimated that 1% of medicinal products currently sold to the European public throughthe legal supply chain are fake and the number is increasing. In other parts of the worldmore than 30% of the medicines on sale can be fake. More and more innovative and life-saving drugs are counterfeit.

Control over packaging, internet sales

Parliament will vote in Strasbourg on the new law, including more safety rules, sanctions oncounterfeiters and a control system to prevent dangerous medicinal products from reachingthe patient.

MEPs on the Environment Committee managed to add to the rules regulating the sale ofpharmaceuticals via the internet, as the internet is one of the main routes by which fakemedicines enter the EU market

The MEPs also want to add to the European Commission's proposals regulating the saleof pharmaceuticals via the internet. Not all countries allow it but if they do, the sellers haveto obtain a special authorisation, carry an EU logo, list on a European database, and linkto a central website at government level.

On 27 April, Parliament's rapporteur Marisa Matias (GUE/NGL) said, "counterfeit medicinesare a form of pharmaceutical crime - criminal networks easily overcome the national borders.I think that the absence of legislation encourages counterfeiters today. Falsified medicinesare silent killers because they can seriously harm patients."

The debate is expected to start around 1800 CET in Strasbourg. You can watch it live onlinehere using the first link.

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20110207FCS13232 - 8/22

Bus passenger rights to enter into force in 2013

• New law provides for compensation of 50% of the purchase price as well as a fullrefund of the ticket, if an operator cancels a service and cannot honour the transportcontract

• If there is a delay of over 90 minutes according to the timetable, passengers must begiven snacks and refreshments.

The missing link on passengers' rights under EU law was finally put in place in Strasbourgon Tuesday when the European Parliament adopted new rules laying down greater rightsfor bus and coach passengers.

After two years of tricky negotiations, Parliament and the Member States have agreed onrules covering all long-distance scheduled services (250 kilometres or more), whether na-tional or crossborder, starting in spring 2013.

Compensation

For such services, the new law provides for compensation of 50% of the purchase price aswell as a full refund of the ticket, if an operator cancels a service and cannot honour thetransport contract, even by other routes or means of transport, following a delayed departureof at least two hours. Passengers who prefer not to go ahead with their trip following acancelled departure or a two-hour delay will be entitled to a full refund.

If there is a delay of over 90 minutes according to the timetable, passengers must be givensnacks and refreshments. If a trip is broken or if there is an accident or a delay requiringpassengers to spend the night on the spot, the operator will also be required to offer up totwo nights in a hotel at a maximum price of €80. The operator can only be exempted fromthese obligations if the problem is caused by natural disasters or weather conditions thatprevent the journey taking place under safe conditions.

In addition, the operator must provide for a refund with a ceiling of no less than €1200 ifluggage is lost or damaged. In the event of death or injury as the result of an accident, theoperator will be liable for payment of up to €220,000 (or more, if national law so provides).

To enable smaller firms to adjust to the new rules, Parliament voted to allow Member Statesto exempt certain regular national services or those where an important part of the serviceis provided outside the EU, for a maximum of four years, renewable once.

Fundamental rights

At the same time, thanks to MEPs a package of twelve fundamental rights was approvedwhich will apply to all regular services regardless of distance. These rights include informa-tion before and during a journey and the needs of people with disabilities or reduced mobility.Non-discriminatory access to transport is guaranteed, with full compensation if wheelchairsor other mobility equipment are lost or damaged.

Staff training

Bus and coach staff must be trained, under the regulation, to provide appropriate assistanceto reduced-mobility passengers who make a request at least 36 hours before a departure. If an operator is unable to provide suitable assistance, a reduced-mobility passenger willhave the right to be accompanied at no extra cost by a person of his/her choice.

"This agreement is very important for transport and tourism. It embodies a strategic balance,as it protects smaller firms and will make life easier for people with disabilities", said AntonioCancian (EPP, IT), who steered the legislation through Parliament.

Parliament adopted the legislation today under the co-decision procedure (third reading con-ciliation agreement) by 504 votes to 63 with 89 abstentions.

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Pension reforms should ensure sustainability and adequate in-come

• Non-legislative report debated• Member States must act to ensure that pension schemes can sustainably deliver an

adequate income to the EU's growing number of retired people• The resolution was approved by 535 votes to 85 with 57 abstentions.• EC paper: "At present there are four people of working age for every person over 65,

by 2060 there will be just two"

Member States must act to ensure that pension schemes can sustainably deliver an ade-quate income to the EU's growing number of retired people, despite the economic crisis,says a Parliament resolution adopted on Wednesday. Pension portability must also be ad-dressed, as must inequalities faced by women and older workers, stress MEPs."At present there are four people of working age for every person over 65, by 2060 there willbe just two" says a European Commission Green Paper, to which the European Parliamentresolution is a response.

The resolution was approved by 535 votes to 85 with 57 abstentions. Ria Oomen-Ruijten(EPP, NL), who drafted the resolution, commented that "although Member States play thelead role, there are aspects where coordination at European level is important. The ageingof the population has a big impact because not all Member States have put money asidefor their pensions. This could lead to enormous expenses which will have consequences forthe Stability and Growth Pact. The supervising authority should monitor pension systemsand some Member States must be encouraged to provide for a safe and adequate pensionsystem".

Economic pressures

Responsibility for pensions lies with Member States, which are re-evaluating or reformingtheir schemes in the light of the current economic situation and the ageing of their popula-tions. MEPs urge EU countries to maintain "stable, reliable and sustainable" pension sys-tems as well as adequate retirement allowance levels to combat poverty in old age. Properconsultation should take place before making changes, they add.

Portable pensions

Europeans usually work for several employers during their careers, and many spend peri-ods working in different EU countries. MEPs want the EU and Member States to removeobstacles to mobility and address pension transferability difficulties within and between EUMember States. For example, they say retirement plans should not require long contributionperiods to be valid.

Older workers

MEPs note the wide gap between the statutory pension age (which is under review in somecountries) and the actual age at which many stop work. Older workers would benefit frombetter adapted workplaces and working conditions, as well as improved protection againstdismissal, they say.

Gender inequality

MEPs want greater emphasis on gender equality. Inequalities in the labour market are trans-lating into lower pensions for women, who face a high risk of poverty in old age. On average,women are paid less than men for equivalent work. They are also more likely to work part-time and take longer career breaks to care for family. MEPs urge the Commission and Mem-ber States to address inequalities and take account of these factors in retirement benefits.

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20110207FCS13232 - 11/22

********

Ahead of the debate we looked at some of the issues surrounding pension reform.

Millions of Europeans depend on pensions. Millions more will soon do so, making up an evergreater proportion of Europe's greying population. Meanwhile, EU countries have widelyvarying retirement ages and spend very different proportions of GDP on social security. Howcan we square these many circles? Also how will we pay and do we all need to work longer?We spoke to two MEPs with diverging views.

The report on "Adequate, sustainable and safe European pension systems" by Dutch Chris-tian Democrat Ria Oomen-Ruijten was backed by MEPs on the Parliament's EmploymentCommittee on 1 February and will be debated Tuesday afternoon in plenary from about 1630CET. Watch live via the first link below.

The report urges stable, reliable and sustainable" pensions systems and says principles ofsolidarity between generations and national solidarity are key.

One of the ideas to make pension systems healthier is to raise the retirement age so weasked an MEP from the Netherlands (where the retirement age has been raised), and onefrom France, where the majority of citizens is against a longer working life what they think.

Ms Oomen-Ruijten says it is important to discuss the change of retirement age with thepublic: "It is of utmost importance to take a decision like this in dialogue with social partners". She added, "to ensure pensions for the future it is necessary for more people to participatein the labour market and to do so for longer. Many States with pay-as-you-go systems areconfronted with big increases in costs, which means growing pressure on solidarity and aheavy burden on the younger generation".

"We are facing enormous demographic challenges, and we need to act now to preventproblems in the future. Member States also need to limit the prevalence of early retirementschemes and create a labour market on which people can participate in old-age, especiallyin precarious jobs," she said.

French Socialist Françoise Castex has a different view. "They say that since people livelonger we should work longer, otherwise we won't have balance with pensions. We don'tknow what it will happen in 10 or 20 years for life expectancy and demography. In somesocial classes, for instance, there are problems in accessing medical care and for this reasonlife expectancy is decreasing".

She said the starting point must be the needs of people. "The economy should adapt itselfto the needs of people and not vice versa. France will never accept a European proposalthat we have to work more. It is against our European social model. We need to protectemployed people and to ensure enough pension funds."

The European Commission is awaiting the EP's views before coming forward with a proposalon European pensions.

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Greying Europe• In the EU in 2008 4 people were employed for every pensioner, in 2020 it will be five and in

2060 it will be two• in 2010 the average age at which people stop work is 61.4 years• Life expectancy for men will increase from 76 years in 2008 to 84 in 2060 and for women from

82 in 2008 to 89 in 2060• By 2060 average public expenditure relating to ageing population will be 4.75% of GNP and

for pensions 2.4% of GNP

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Fake medicines: Parliament approves new rules to protect pa-tients better

A new law to prevent fake medicines from entering the legal supply chain was approvedby Parliament on 16 February. Internet sales will be covered by the law, which also intro-duces new safety and traceability measures, as well as sanctions against counterfeiters.This law still needs to be formally approved by the Council of Ministers.

"Falsified medicines are silent killers, either because they are devoid of effect or becausethey contain toxic substances that may harm, or even kill, those who take them. The ab-sence of a legal framework encourages counterfeiting, an organized crime. We have beenwitnessing a huge growth of this criminal activity, with an increase of 400% in seizuresof fake drugs since 2005. Protecting patient safety is the core aim of this directive", saidMarisa Matias (GUE/NGL, PT), who led discussions in Parliament. Her report was adopt-ed with 569 votes in favour, 12 against and 7 abstentions.

An estimated that 1% of medicinal products currently sold to the European public throughthe legal supply chain are falsified and the share is growing. In other parts of the world, upto 30% of the medicines on sale may be fake. In particular, more and more innovative andlife-saving drugs are counterfeit.

Internet sales

MEPs deemed it necessary to regulate internet sales of medicines because this is a keyroute by which fake ones enter the EU market. The Commission's original proposal did notcover internet sales. Under the new law, In those EU Member States where internet phar-macies are allowed to operate, they will need to be authorised to supply pharmaceuticalsto the public.

Internet pharmacy sites will be required to display a common logo, which should be recog-nisable throughout the EU, so as to help the public to ascertain that they are linked to anauthorised pharmacy. All authorised internet pharmacies will be linked to a central website in each Member State and will be listed on that web site. The various national websites will in turn be linked to an EU web site. Citizens will also have to been informedabout the risks involved in buying medicines via the internet.

Safety features, traceability and product recalls from patients

The legislation updates current rules and provides for new safety features to be placed onindividual packs in order to identify them, guarantee their authenticity, and enable phar-macists to check whether the outer packaging has been tampered with. These safety fea-tures - which still need to be developed by the European Commission - could for exampleinclude a serialization number which can be "read" by the pharmacy to ascertain that thepack is authentic.

As a general rule these features would apply to all prescription medicines, unless there isclearly no risk. They would apply to non-prescription medicines only in exceptional cases,where there is a risk of falsification. Where medicines are repackaged, these safety fea-tures must be replaced by equivalent ones.

Product recalls

Member States must also put in place a system to preventing dangerous medicinal prod-ucts (falsified and with quality defects), from reaching the patient. This system must permitrecalls, including recalls from patients.

If a medicinal product is suspected to present a serious risk to public health, all actorsin the supply chain and in all other Member States must be rapidly alerted. If the falsi-fied medicines reach patients, then the alert must be given within 24 hours, so that themedicines can be recalled.

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Brokering, export to third countries and sanctions

Pharmaceutical distribution networks are becoming increasingly complex. They involvenot only distributors, who are already covered by existing legislation, but also medicinalproduct brokers. MEPs stipulated that in future, brokers will have to register as such, andmay be removed from the register if they fail to comply with the new rules.

MEPs wanted not only imports but exports of medicines to third countries to be better reg-ulated. They therefore stipulated that the relevant rules on information must apply to thesupply of medicines to authorized persons in third countries, too.

Finally the new directive states that sanctions imposed on those who infringe it must notbe inferior to those applicable to infringements of national laws of similar nature and im-portance.

Next steps

The text approved by MEPs results from an agreement reached with Council, which mustalso give its formal approval. Once it is signed into law, Member States have 24 months tomake any necessary changes to their national legislation.

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20110207FCS13232 - 15/22

Croatia: the EU's 28th Member State?

• The fight against corruption, support for returning refugees and the restructuring ofshipyards are among the remaining challenges facing the country

• MEPs acknowledge that major efforts have been made to change the constitution,reform the judiciary

Croatia's EU membership negotiations could be completed in the first half of 2011 provid-ed Zagreb pushes ahead with reform, according to a resolution adopted by Parliament onWednesday. Yet the biggest challenge may be "selling" the benefits of EU membership toa sceptical Croatian population.

The fight against corruption, support for returning refugees and the restructuring of shipyardsare among the remaining challenges facing the country. However, MEPs acknowledge thatmajor efforts have been made to change the constitution, reform the judiciary and co-operatemore closely with the International Criminal Tribunal for the former Yugoslavia (ICTY).

EU front runner

In a resolution adopted by 548 votes to 43 with 52 abstentions, MEPs congratulate Croatiaon its "substantial progress" in introducing the reforms needed to join the EU. "Negotiationswith Croatia can be completed in the first half of 2011 provided that the necessary reformscontinue to be pursued resolutely", says Parliament. The resolution notes the considerableimprovements to the constitution and to the judiciary, as well as Croatia's closer co-opera-tion with the International Criminal Tribunal for the former Yugoslavia (ICTY). It stresses,however, that the tribunal's request for important military documents remains unanswered.Regarding the ongoing judiciary reforms, the resolution underlines the need "to proceedquickly with the prosecution of war crimes" and to improve witness protection.

Corruption

Whilst acknowledging the government's efforts to fight corruption and prosecute two formerministers and a former prime minister, MEPs judge that corruption "remains a serious prob-lem". Few corruption cases have come to court and most remain at the investigation stage. .Parliament asks OLAF (the EU's anti-fraud body) to cooperate closely with the Croatian au-thorities to shed light on the potential secondary corruption which may be generated withinthe EU Institutions.

Refugees

Overall, progress has been made in the field of refugee returns and public hostility towardsreturning Serbs has diminished. However, say MEPs, more effort is needed to help returneesto acquire permanent resident status, improve house reconstruction and launch social inte-gration projects for refugees, thousands of whom have not yet returned and remain in Serbia.

Privatisation of shipyards

The Croatian government should accelerate the process of restructuring and privatisingshipyards, failing which it will not be possible to close the "competition" chapter of the EUaccession negotiations on time.

The biggest challenge starts at home

MEPs are very concerned that the majority of Croatian citizens think Croatia's EU member-ship would not benefit the country, according to the latest Eurobarometer survey. They urgethe Croatian authorities and civil society to mobilise and make citizens "feel the Europeanproject is theirs as well". Croatia will need to put EU membership proposals to a referendum.In addition, parliamentary elections will take place in November 2011.

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20110207FCS13232 - 16/22

The EP discusses the Arab world's "democratic tsunami"

The post–Mubarak era is dawning and 80 million Egyptians face the complex task of es-tablishing a new democratic order which could inspire the entire region. Parliament dis-cussed the extraordinary developments in the Arab world, the high hopes for the futurebut also the fears that can't be ignored in this "democratic tsunami" as one MEP describedit during Wednesday's debate, (16 February). As the EU's foreign policy chief CatherineAshton visits the regional to hold talks with key officials MEPs debated the situation inEgypt.

On behalf of Catherine Ashton, Štefan Füle, the Commissioner for Enlargement andNeighbourhood Policy, announced a special meeting of EU Foreign Ministers this comingSunday ahead of Ms Ashton's visit to Egypt on Monday.

On the situation in the country, Mr Füle said "we have taken good note of the commit-ments to revise the Constitution and to hold parliamentary and presidential elections, tohonour international treaties and obligations and to limit the military role for 6 months".

He added that even though "it is not for us to dictate outcomes or propose solutions", theEU "will closely watch the steps that will be taken", hoping that "they will pave the way to-wards democratic, free and fair elections".

For the centre right European People's Party Spanish MEP José Ignacio Salafran-ca said: "The departures of Mubarak and Ben Ali are necessary conditions, but are notenough to guarantee the democratic transition process, a process that still presents manyuncertainties, the most important being consolidating democracy".

He went on to say that: "This is a good occasion to show that the EU understands in thishistorical moment we have to play as a global actor and make the required homework orwe will have to accept not playing the role we wanted to have".

For the Socialist Group Romanian MEP Adrian Severin observed that: "Events in Egyptproved that Islam could not be only fundamentalist but can also be democratic. The popularrevolt was, on the one hand, the result of the evolution of Egyptian elites and, on the otherhand, a consequence of the hardship caused by the global crisis. If the EU does not addressimmediately the need to overcome hardship in Egypt, the revolution might move to anarchyand from there onto another dictatorship."

Leader of the Liberals Guy Verhofstadt told the House: "The Commission has to comeforward with a credible global plan for Tunisia and Egypt" although he pointed out that theEU must also send a message to Egypt on the lack of involvement of the secular parties inthe efforts to redraft the Constitution. He concluded by saying that "what we need now is abold message by High Representative Catherine Ashton on what is happening in Yemen,Algeria, Iran, Libya and Morocco without waiting for "things to happen".

French Green MEP Daniel Cohn-Bendit told the House that "we have today in Egypt andTunisia a Democratic tsunami". He went on to say "we must mobilize special funds to helppeople in Tunisia and Egypt now because the reasons for the revolt were first hunger, miseryand that if in the transition to democracy there is no relief from poverty there is a risk therebels may move to the side of fundamentalists".

British MEP Charles Tannock (ECR) underlined the importance of the Camp David Accordsto Israel's security. He pointed out that the "EU should make its help conditional on preserv-ing peace treaty" and ensure adequate financial aid while "EU political parties must help setup secular sister parties in Egypt".

Willy Meyer of the GUE/NGL group stated: "The EU has a very serious problem with itsneighbourhood policy. We have passed from being custodians of Ben Ali and Mubarak topretending that we are protecting the revolutionary process of a civil society that wantschange. He added that "both revolutions are seeking a social and legal status that hasnothing to do with religion".

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Italian MEP Fiorello Provera (EFD) said: "The fall of Mubarak opens the way not only todemocracy, but an opportunity for the Egyptian people. These elections, if they are held,will allow economic development. The European policy in Egypt must be followed by re-forms and must help people to choose their future for themselves".

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20110207FCS13232 - 18/22

MEPs want banks/EU Institutions to help small businesses find fi-nance

• Resolution calls on banks to make finance available• Economic crisis has made situation more critical

Banks and EU programmes should provide more support for small and medium sized en-terprises (SMEs) according to a resolution backed by MEPs Wednesday. The cross-partymotion identifies problems in accessing finance as one of the most pressing facing Europe'sbusinesses with less than 250 employees. Across the European Union it is estimated thatover 100 million people are employed in such companies. We spoke to some of the MEPsbehind the motion.

Austrian Christian Democrat Othmar Karas said, "member states where SME finance de-pends mainly on large commercial banks, which is the case for example in UK or Belgium,have more problems than regions with functioning savings banks and cooperative banks."

The financial crisis has exacerbated problems. German Green Reinhard Bütikofer said,"Banks have become much more risk-averse and require higher guarantees. This is creatingdifficulties across all SMEs sectors, but in particular for innovative enterprises." As a result,several companies have gone bankrupt due to a lack of liquidity even though their orderbook was full.

The resolution says that credit and loan guarantee schemes remain crucial for growth ofSMEs.

Hungarian Socialist Edit Herczog told us, "regulations related to the bank sector should...notpreclude the free movement of credit to entrepreneurs and the banks shouldn't look at smallbusinesses as a source of risk but a source of opportunity."

MEPs called for more funds, especially innovative financial instruments. Ms Herczog said,"less than the 2% of SMEs benefit from EU-financed program...but a much higher percent-age of enterprises is now seeking European solutions."

Bureaucracy is another issue. The resolution points out the necessity of removing admin-istrative barriers that prevent the use of financial programmes, particularly by individual en-terprises asking for small amounts of funding.

Mr Bütikofer said action needs to be taken on several fronts: "On the one hand, existingguarantee instruments under EU financing programmes and risk-sharing schemes shouldbe enhanced for easier SME access. On the other, raising more equity and quasi-equityfinancing is essential for supporting start-ups and small innovative companies."

The Parliament has an all-party SME intergroup, chaired by Othmar Karas. "The SME inter-group sees itself as an advocate for the concerns of small and medium sized-enterprises,"he said. It includes 138 MEPs.

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20110207FCS13232 - 19/22

EU - South Korea free trade agreement: green light

• MEPs give green light for ratification on Thursday (17 February) of the most ambitiousfree trade accord the EU so far negotiated.

• The EU's first FTA with an Asian country includes strong safeguard measures to protectEuropean industry from an eventual surge in South Korean imports.

Following two and a half years of negotiations MEPs gave the green light for ratifi-cation to the EU's Free Trade Agreement (FTA) with South Korea on Thursday (17February) by 465 in favour, 128 against and 19 abstentions.

The Safeguard clause (OLP) was also adopted with amendments by 495 in favour, 16against and no abstentions.

The EU's first FTA with an Asian country includes, at the insistence of MEPs, strong safe-guard measures to protect European industry from an eventual surge in South Korean im-ports.

The EU's long-awaited free trade agreement (FTA) with South Korea - its 8th largest tradingpartner - will eliminate about 98% of import duties and other trade barriers in manufacturedgoods, agricultural products and services over the next 5 years. The most comprehensivetrade deal until now by the EU is expected to double its trade with Korea in 20 years, boostingjobs and growth.

Following carmakers' fears over imports of cheap cars, the FTA includes safeguard mea-sures. They will allow the EU to suspend further reductions in customs duties or increasethem to previous levels, if lower rates lead to an excessive increase in imports from SouthKorea, causing or threatening to cause "serious injury" to EU producers. The EU also gainedguarantees from Seoul that new Korean legislation on automobile CO2 emissions will nothave an adverse effect on Europe's car makers.

Clear signal: EU is open for business

"The EU needs to send a clear signal, now more than ever, that it is open for business. Theswift adoption of this agreement will send out a positive signal that we are not reverting toprotectionism in response to the economic environment", as Parliament's rapporteur on theFTA Robert Sturdy (ECR, UK) underlined.

The British Member hopes that the passage of this FTA will enable the EU to complete othercrucial trade agreements with emergent economies, such as India. "The EU must not giveup on achieving a multilateral deal through the WTO but, in the meantime, we should seekas much bilateral opening of trade as possible" he pointed out.

On safeguard measures he said that "there have been some genuine concerns about thisFTA, and there has been a great deal of scaremongering too. However, with the robustsafeguard clause that we have included in the deal, we can be assured that our business-es should only enjoy the immeasurable benefits that this FTA will bring, with limited sideeffects".Why a safeguard clause?

Minimising the EU industry's concerns was also Spanish MEP Pablo Zalba Bidegain's(EPP) target: "Some sectors of the European industry, specially the automotive sector, hadshown their concerns with the FTA with South Korea, and the negative impact on the indus-try", the rapporteur on the safeguard clause explained.

"We wanted to reach three objectives: First, to create a safeguard clause which would beeasy to apply. Second, that the safeguard would be the most effective possible to address apossible surge of South Korean imports. And third, that it would make the FTA more attractiveto the concerned European industry" said Ms Bidegain.

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What goods are covered? "All products from South Korea that may create, because of asurge of imports, an injury or a threat of injury for European Industry. We have put specialprotection measures for the most sensible sectors: consumer electronics, textile productsand specially the European automotive industry", explained Mr Zalba. Korea enjoys a com-parative advantage over the EU in these sectors.

Final step in the long talks

Launched in May 2007, and following two and half years of negotiations, the deal was (ini-tialled in October 2009 and) finally signed at the EU-South Korea summit in Brussels on 6October. Under the Lisbon Treaty, all international trade deals need the Parliament's con-sent. Equally, under Lisbon, the safeguard regulation will now be adopted by Parliamentthrough the ordinary legislative procedure (former co-decision).

Provided that MEPs adopt the regulation and grant the consent, the deal will come into forcein July 2011.

EU-Korea trade relations• South Korea has approximately 49 million inhabitants• The EU is Korea’s 2nd largest export market, after China. South Korea is the EU’s 8th largest

trading partner.• Trade in goods was worth around €54 billion in 2009. The EU runs a deficit (€ 10.5 billion)

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Egypt: back democratic transition and freeze Egyptian leaders'assets, say MEPs

• MEPs call for a freeze on the assets of all Egyptian leaders responsible formisappropriating public funds in the country

• The resolution outlines the role that MEPs believe the EU should play in helping itsstrategic Mediterranean neighbour's transition to democracy.

Reacting to the dizzying changes in Egypt, MEPs passed a resolution calling on the EU torethink and improve its political and financial strategy to assist the country’s transition todemocracy, including organising free elections. They also call for a freeze on the assets ofall Egyptian leaders responsible for misappropriating public funds in the country.

President Hosni Mubarak's departure “has opened a new phase in the political transitionin Egypt” and the Egyptian armed forces must now play a constructive role, facilitating thepolitical process, ensuring free elections and keeping to its peace commitments with Israel.The resolution outlines the role that MEPs believe the EU should play in helping its strategicMediterranean neighbour's transition to democracy.

EU role in assisting Egypt

In the past, the goal of stability has often overshadowed values of democracy, social justiceand human rights in the EU’s relations with its southern neighbours, acknowledge MEPs.They therefore wish to ensure that the clause allowing the EU to suspend any associationagreement with a third country in the event of serious human rights violations can be imple-mented effectively in future.

If there is any lesson to learn from the revolution in Egypt, it is that the EU’s existing poli-cies towards southern Mediterranean countries have failed, note MEPs, who advocate re-vising the EU's European Neighbourhood Policy (ENP), so as to prioritise goals such asfostering the independence of the judiciary, combating corruption or ensuring that bilateralagreements give precedence to basic freedoms over economic aims.

Furthermore, ENP countries must fulfil a list of political criteria in order to obtain the so-called “advanced status” in their relations with the EU, says the resolution. Tunisia has beennegotiating with Council to become an advanced EU partner in the Mediterranean since May2010. This status was first granted to Morocco, in 2008.

MEPs also favour mobilising all EU financial instruments, such as the ENP Instrument, theEuropean Instrument for Democracy and Human Rights and the Stability Instrument, toassist Egypt’s transition to democracy.

Finally, the EU Foreign Affairs High representative should create a “task force”, to includeMEPs, which would co-ordinate the response to all financial and political needs during thetransition process, including institution-building efforts, ensuring the independence of thejudiciary and sending a mission to observe elections.

Union for the Mediterranean criticized

The Union for the Mediterranean (UfM), a multilateral partnership created in 2008 whichencompasses 27 Member States and 16 countries from the Mediterranean basin, “provedineffective to meet the growing mistrust and the basic needs of the people concerned”, saysthe resolution. Both the UfM and the Anna Lindh Euro-Mediterranean Foundation are urgedto react to these historic circumstances, mobilize civil society and play a more active role inpromoting democracy and human rights in the region.

€1 billion for SMEs in the Mediterranean basin

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Voting on separate legislation on Thursday, Parliament also decided to increase by €1 billionthe overall amount of guarantees to the European Investment Bank for loans to projectsoutside the EU. The whole of the increase should be used to back loans for small andmedium sized enterprises and infrastructure in the Mediterranean basin.

DelegationAlso on Thursday, Parliament's Conference of Presidents approved sending a delegation ofMEPs to Egypt in the coming weeks.