A3-0335/94

Resolution on the draft notice from the Commission to the Member States setting the guidelines for the modernisation of the textile and clothing industry in Portugal (COM(94)0082 - C3-0138/94)

The European Parliament,

-having regard to the Commission's draft notice to the Member States (COM(94)0082 - C3-0138/94),

-having regard to Council Regulation (EEC) No. 2081/93 (the framework regulation),

-having regard to Article 11 of Council Regulation (EEC) No. 2082/93 (the coordination regulation) which is the legal basis for Community initiatives, in particular the provision that the measures financed should be "of significant interest to the Community",

-having regard to Article 3(2) of Council Regulation (EEC) No 2083/93 (ERDF regulation) where it is stated that programmes may be undertaken on the initiative of the Member States or of the Commission in agreement with the Member State concerned,

-having regard to the code of conduct on the implementation of structural policies by the Commission where it is stated that the Commission "will take Parliament's requests in to consideration whenever possible in order to take them in to account when deciding on each initiative",

-having regard to its resolution of 22 October 1991 on restructuring the textile and clothing industry in the Community,

-having regard to the Communication from the Commission on "The Future of Community Initiatives under the Structural Funds" ("the Green Paper") and to its resolution of 28 October 1993 thereon,

-having regard to the notice to the Member States (issued in 1992) laying down guidelines for operational programmes for regions heavily dependent on the textiles and clothing sector (RETEX) and to the proposal to extend RETEX until 1999 and broaden its coverage,

-having regard to the annual Commission report on the situation of the textile and clothing industry (COM(93)0525),

-having regard to the report of the Committee on Regional Policy, Regional Planning and Relations with Regional and Local Authorities and the opinions of the Committee on Budgets, the Committee on Social Affairs, Employment and the Environment and the Committee on Economic and Monetary Affairs and Industrial Policy (A3-0335/94),

A.whereas the Commission in its Green Paper indicated that it wished to reduce the number of initiatives and stated that "Community initiatives .. provide a framework for encouraging transnational cooperation and the pooling of know-how in areas of shared concern, .... are an essential feature in structural policies with a genuine Community dimension in contrast to Community financial instruments simply supporting national policies, ... and contribute to innovation by experimenting with new approaches,"

B.whereas in its above-mentioned resolution of 28 October 1993 it stated that "Community Initiatives should be European in nature, transcending purely national interests ... and should not become indirect instruments of redistribution of financial resources to the Member States,"

C.whereas the ERDF regulation directs Community initiatives under the ERDF towards problems associated with the implementation of other Community policies, the application of Community policies at regional level and problems common to certain categories of regions,

D.whereas Community initiatives are limited to only 9% of total funding for the Structural Funds,

E.whereas the GATT agreement is likely to have implications for the economic development of a number of the European Union's textile producing regions, especially, as in Portugal, where their present competitiveness depends on low labour costs,

F.whereas the textile and clothing industry in Portugal accounts for a third of industrial exports and of industrial employment; whereas the industry is heavily concentrated in the north and centre of the country,

G.mindful of the excessive concentration of production done to order for undertakings and economic operators in and outside the country,

H.whereas the section of the workforce involved is mainly female with inadequate vocational training,

I.whereas value added by employee and productivity in the Portuguese textile industry are significantly below that of other Member States, indicating the need for further modernisation and investment,

J.whereas the draft notice states that the grant of aid is subject to Commission approval of a strategy for adaptation of the textile and clothing industry in the period 1994 to 1999 to be presented by the Portuguese authorities,

K.whereas investment projects financed by the initiative must be eligible under existing industrial aid schemes applicable to Portuguese industry in general and may not be financed through a specific programme in favour of the textile and clothing industry,

L.whereas the purchase of equipment cannot be assisted directly but must take the form of improving access to risk capital and the provision of interest rate subsidies,

M.whereas ECU 100 million will be reserved for interest rate subsidies linked to the acquisition and modernisation of equipment through loans from the EIB,

N.whereas modernisation of the industry may not result in an increase of productive capacity expressed in volume terms,

O.whereas aid can only be granted to firms that are currently trading in the textile and clothing sector,

P.whereas eligible measures include the preparation of business plans for the modernisation of companies, improved cooperation between companies, the improvement of the environment, employee training, retraining of those threatened with redundancy, improvements in design and know-how, consultancy services and better standards of health and safety at work,

Objectives

1.Recognises the importance of the textile and clothing industry as a source of exports and employment in the Portuguese economy in general and in the Norte and Centro regions in particular;

2.Supports the commitment to a contribution from the European Union to the Portuguese textile industry that the Council entered into at the conclusion of the GATT negotiations and notes that it is in accord with the basic objective of the European Union that preventive measures in favour of an industry in decline are more efficient than treating the consequences;

3.Raises no objections to the introduction of a special programme to modernise the industry and to the allocation of ECU 400 million for that purpose, provided that Community legislation on fair competition is respected;

4.Stresses the fact that the nature and objective of the aid fully conform to the provisions of Title XIII, Industry, of the EC Treaty, and the Portuguese textile and clothing industry is an appropriate case for which its competitiveness via a modernisation plan should be ensured;

5.Points out that the objectives set out in the Commission's guidelines are similar to those stated in Article 130 of the EC Treaty and that the measures in support of Community action are the ones stated in its paragraph 1:

(a)speeding up the adjustment of industry to structural change,

(b)a favourable environment for SMEs,

(c)cooperation between undertakings,

(d)fostering of innovation, research and technological development;

The appropriateness of Community Initiatives as a vehicle for sectoral aid

6.Expresses grave misgivings, however, over the Commission's decision to propose a Community initiative as the means of allocating a significant amount of aid to a single industrial sector in one Member State; considers that this proposal is in flagrant contradiction with the suggestions made by the Commission itself for the future of Community initiatives in its Green Paper and may not even conform with Article 11 of the coordination regulation;

7.Reminds the Commission that Parliament is the joint budgetary authority and is given a specific consultative role in the approval of initiatives in the code of conduct on implementation of the Structural Funds; believes that the Commission should have consulted Parliament before informing Council that it intended to pre-allocate ECU 400 million from the budget reserved for Community Initiatives for a purpose that had not been foreshadowed in the Green Paper;

8.Is of the opinion that the objectives of this programme do not correspond to the definition of Category 2 of the Financial Perspectives;

9.Points out that the same benefit to the Portuguese textile industry can be obtained if the Commission proposes a programme similar to the PEDIP programme specifically for the textile industry in Category 3 of the Financial Perspectives without excluding the possibility of increasing the budget for RETEX and other relevant initiatives with an industrial dimension such as ADAPT and SMEs;

9a.Stresses that the reserve of ECU 1.6 billion is for Community Initiatives only;

10.Believes, despite its reservations, that it would be wrong to penalise Portugal for the Commission's failure to choose the most appropriate instrument to allocate the aid in question and to make the Council face up to the consequences of its political decisions; considers therefore that the Commission should bring forward without delay a new proposal to allocate ECU 400 million for the modernisation of the Portuguese textile industry based on the suggestions in paragraph 9 above;

11.Considers, for its part, that it would have been better to finance a programme in Category 3 of the Financial Perspectives with an amount of about ECU 67 million per annum for 6 years, starting in 1994;

12.Nevertheless, recognizes that:

(a)the purpose of this Commission proposal is to meet the need to speed up further the modernization of the Portuguese textile industry, as was recognized by the General Affairs Council, with the Commission's full agreement, at its meeting on 15 December 1993;

(b)that need, stemming from the recent GATT agreement, represents a new and unforeseen Community requirement as laid down in paragraph 11 of the Interinstitutional Agreement of 29 October 1993 on budgetary discipline and improvement of the budgetary procedure;

(c)in full compliance with the text and spirit of that Interinstitutional Agreement and of the aforementioned decision of the General Affairs Council, this initiative must be adopted and, in accordance and compliance with paragraph 12 of that Agreement, a consequent revision of the respective Financial Perspectives must be undertaken immediately in respect of Category 2;

The conditions attached to the programme

13.Considers that the condition requiring the Portuguese authorities to ensure that the total productive capacity of the textile and clothing industry in volume terms should not increase is excessively onerous and will block the further development of an industry in which Portugal has a competitive advantage that it has not yet fully exploited;

14.Considers, however, that this comparative advantage must not be based on wage conditions below the legal and contractual limits, on child labour or on the use of work done to order as a way of over-exploiting the workforce without proper security under cover of misleading descriptions such as repair shops and self-employed work;

15.Believes that the grant of Community aid should be conditional on the provision of proof by undertakings seeking co-funding of compliance with Community and national provisions regarding working conditions and the working environment, notably as regards the protection of young people at work, working hours, social protection, health, hygiene and safety at the workplace;

16.Recalls the emphasis that the Commission placed on innovative measures in the Green Paper and is therefore surprised that aid to new companies is expressly excluded; believes that it is not coherent to exclude new companies from an aid package aimed at modernising an industrial sector and rendering it more dynamic;

17.Notes that a specific aid regime for the textile and clothing industry is expressly forbidden in the draft notice even though the principal objective of the initiative is to modernise that industry; concludes therefore that aid will be directed to the textile sector through the general industrial aid schemes financed from the CSF which lends further weight to the view that the aid package would have been best channelled through the CSF;

Eligible measures

18.Approves the list of measures set out in the draft notice; believes that some provision should be made, in appropriate cases and subject to competition rules, for direct aid to SMEs and, in the case of large enterprises, for refundable grants linked to productive investment;

Loans and interest subsidies

19.Supports the involvement of the EIB but asks the Commission to reconsider the restriction that only lending by this bank should benefit from interest rate subsidies; believes that lending from other banks, notably banks with a tradition of lending to entrepreneurs in the relevant regions, should also be eligible for such subsidies;

Links with the CSF for Portugal and other initiatives

20.Stresses the need to coordinate the aid with the measures agreed in the CSF, with the other initiatives, in particular with RETEX; urges that the social consequences of the modernisation process promoted by the initiative should be dealt with under the social measures included in the CSF; in particular any employees made redundant should be offered re-training and reintegration;

21.Stresses the need for the initiative to form part of or be coordinated with an integrated plan for virtually mono-sectoral regions which should make provision for the foreseeable worsening of unemployment already found in the sector by promoting diversification into other economic activities which are most likely to create jobs;

22.Requests the Commission, where practicable, to indicate the estimated share of resources to be allocated to the ESF and to the ERDF;

Consultation

23.Believes that the grant of Community aid should be subject to the provision of proof of participation of the regional and local authorities concerned and the social partners in drawing up the operational programme and proof of the existence of the mechanisms enabling them to participate in its implementation, in accordance with the provisions of Article 4 of the framework regulation;

Reports and publicity

24.Calls on the Commission, acting in partnership with the Member States, to ensure that citizens of the Union are adequately informed of the possibilities of Community co-funding provided by this initiative; recalls in this connection its resolution of 11 March 1994 on information and publicity measures to be carried out by the Member States concerning assistance from the Structural Funds and the Financial Instrument for Fisheries Evidence (FIFG), in particular its paragraph 5 on the establishment of Euro Info Centre type information networks;

25.Asks the Commission to keep it regularly informed of the implementation of the Initiative and, in particular, to forward to it the strategic plan for the industry as soon as it is agreed with the Portuguese authorities;

26.Instructs its President to forward this resolution to the Commission, Council, the Committee of the Regions and the Portuguese Government.