JOINT COMMITTEE ON EUROPEAN AFFAIRS díospóireacht -
Thursday, 10 Apr 2003

Vol. 1 No. 20

EU Institutional Reform: Presentation.

Chairman

I extend a warm welcome to the Vice President of the European Commission, Mr. Neil Kinnock, who is no stranger to us. He is a regular visitor and we are delighted to see him back in Dublin.

I have read through the document Reforming the Commission and the White Paper, parts 1 and 2, and the action plan. They are very impressive documents and it will be interesting to hear the progress that has been made in implementing their recommendations. You might be aware that this committee has new powers under legislation passed last year whereby in the sub-committee on scrutiny, which I also chair, we receive within four weeks any proposals for draft regulations or directives which the Government receives. We consider those and decide whether they need further detailed examination by any of the sectoral committees of the Oireachtas.

We also meet the Minister for Foreign Affairs each month before he attends the General Affairs Council and go through the agenda with him. In addition we meet members of the forum, both the Government representative Deputy Dick Roche, his alternate and the parliamentary representatives before and after they attend plenary sessions. Yesterday we had a private session with Deputy Roche to go through some of the more sensitive issues, not least the institutional arrangements, the future of the Commission and issues of that kind. We have tried to close the democratic deficit here. Since last October we have been proactively vetting regulations and directives. We also take the committee outside Dublin and have met in Castlebar and will shortly meet in Waterford.

It is a great opportunity for us to have you here today to consider the reform process which you are leading in the Commission, to get a feel for that and to put some questions to you.

Mr. Neil Kinnock

Thank you very much Mr. Chairman. I am delighted to be here, as I always am to be in Dublin. My visits are less frequent than they used to be but I will retire next year so I will be in a position properly to repair that deficiency. The standard being set by Dáil Éireann in developing the closure of the democratic deficit, as you put it, through scrutiny functions, interviewing Ministers, maintaining contact with members of the European Parliament and an assortment of other developments is something that could be emulated usefully in a number of other places. I have long argued that the Danish model of parliamentary examination, which falls short of mandating but nevertheless absolutely guarantees that the parliament is much more closely apprised, and in detail, of developments in European Union institutions and policies, should be common among the parliaments of member states. Sadly, it is not yet sufficiently common. One of the reasons there is such a focus in the Convention on trying to find innovative ways to improve democratic scrutiny and engagement in the affairs of the European Union is that too many parliaments have been laggardly. I say without any intention of flattery that the initiatives taken here in recent times must be welcomed and should be the norm. If they were, citizens would have a much clearer comprehension of what the EU is, what it does, what it intends to do and what it does not do or intend to do. If we have to rely on much of the European press we guarantee that an enlarged Europe will have a fairly distorted view of what is happening at institutional level. I hope for much more progress in this respect. The Irish press is an honourable exception to this.

I am more than happy to talk about the progress we are making with reform and I will take just a few minutes to outline the developments that have taken place in the three main themes or pillars of reform because I know the committee is interested in this. Mr. Chairman, if you have read the White Paper, the action plan and the review and report which we published a couple of months ago, you have put yourself in a very glorious minority of about 1% of the total citizenry of the EU, or maybe even 1% of all the parliamentarians of the EU. I strongly commend that. If there was some kind of Schumann medal to hand out for achieving these tasks you would be a worthy recipient.

As you may recall, under the presidency of Romano Prodi, in September 1999 we embarked on a reform mandate that very clearly came from the Council in Berlin in 1999 in the wake of the resignation of the Commission led by Jacques Santer, of which I was a member. We began with a reform programme and that mandate also very clearly came from the European Parliament. We took about five months to design the reform we wanted, though in the meantime we made a large number of changes, such as establishing a required and implemented system of rotation of senior management, which will have a lasting effect. Last year we went through the first of those major rotations and that practice will continue. We also did an assortment of other things which altered many of the conventions of the European Commission which had developed over the years, especially in relation to the expectation of some member states to continually occupy certain director general posts. I am happy to report that habit is now broken, and it must never be restored.

The main design was produced on 1 March 2000 after a month of intensive consultation with the staff and their representatives. In that reform design we had three basic themes. The first involved the total modernisation and radical renovation of the system of financial management and control. The second involved the introduction of a system of strategic planning and programming, which is beginning to show evidence of closing the gap between tasks and resources. That gap itself had been a source of financial insecurity and potential mismanagement. The third involved a very large package of personnel policy reform, some of which has been implemented since last April. Other reforms require changes in the law governing staff regulations. Those changes are in the conclusive stages of being negotiated in the Council, having received the overwhelming endorsement of the European Parliament several weeks ago.

On the first and very crucial set of changes, to modernise the system of financial management and control, we have allocated specific responsibility transparently to all officials who have financial handling obligations. They bear these responsibilities in direct form, altering the system in which responsibility invariably lay elsewhere, either upwards, because the decision was too big for the individual, or downwards because prior decisions had been already taken. The consequence was that since everyone, theoretically, had responsibility, nobody had specific responsibility. That is a bad system of management, especially in a public service. The allocation of specific responsibility was therefore crucial. It had to be supported by a variety of means.

We do not expect people to bear these substantial responsibilities single-handedly or without advice or counsel. We have installed effective systems for guaranteeing that. To the credit of the European Union Civil Service, it has embraced the changes and implemented them more rapidly than has been the case in other administrations. Some 3,500 EU civil servants, in a period of less than two years, had to go through a system of training and retraining to discharge these new obligations. It has also made changes to the structure of management and we are now at the end of the second year of the comprehensive system of internal audit. This was installed as part of the change, involving the establishment of a specialist internal audit service and in each directorate general an internal audit capability. We have a dual system of perpetual checking not just on the inputs of financial decision making which has been the habit of the Commission since its inception, but also on the outputs. Targets can be set for improvement. These can be monitored and a perpetual higher performance can be secured. I have abbreviated much for the purpose of this presentation, but people will get the picture of a substantial series of changes.

Connected with these changes, but having wider implications for improving the quality of management, is the introduction of a system of annual activity reports and declarations of assurance from every director general. The first reports were published on time last year and covered 2001. In compiling those activity reports, every single head of service is under explicit instruction to establish any areas of concern or reservation they may have about the circuits for financial management and control within their directorates general. They must publish alongside that an action plan demonstrating how those difficulties can be and will be overcome. Unlike many administrations, we do not collect those reports, put them on the shelf and let them gather dust. Every single one of those reports, together with a synthesis report drawn up by the Secretary General, went to the European Parliament, unchanged, for scrutiny and public debate. It was praised by the Court of Auditors as showing unprecedented openness and characterising what they termed a managerial revolution. We are using accountability and transparency in management as a means of securing higher levels of managerial performance. The evidence of that is certainly coming through.

The second theme of reform is connected with the financial reforms we are undertaking. Strategic planning and programming also requires complex changes and they are now being implemented. We are using a system which may be familiar to members of activity-based management and budgeting. This has the two effects of providing a better system of prior planning of the upcoming year's execution of the budget and the earlier involvement of the development of policy alongside budget availability of the European Parliament. It means that while the European Parliament does not exercise formal powers at the earlier stage, the engagement adds to understanding and transparency of decision making and the allocation of resources.

The introduction of these new management methods is not easy. It is not without a degree of turmoil and resistance. The extraordinary thing is that the reform has been achieved successfully because of the engagement of people at all levels. We acknowledge in the reviews we undertake that all is not perfect - far from it - but the progress is substantial and evident.

The changes in the third theme, relating to personnel policy, were crucial. We have an institution which, up to the introduction of the reforms, had not put any real emphasis on identifying training and rewarding the skill of managing other people. This is extraordinary in a public service where it is obvious that the only real asset of the service is the quality and commitment of the people who work there. The idea that they could be managed was always taken for granted. Promotion to managerial grades has never been on the basis of the capability of people to manage other people, but on their prowess in policy development. This is entirely natural in an institution whose prime function remains the conception and development of policy and the provision of legal proposals and the upholding of the treaties agreed between the member states. We will discharge those policy and legal functions, as well as the financial management functions only, if our organisation is well managed.

A large part of the proposals we made in personnel policy relates to a change in the career structure which maximises the emphasis on promotion through merit and minimises the significance of promotion according to the calendar, so-called seniority. It gives real identification to and opportunities for reward for people who demonstrate their prowess as managers and thereby advance their career by accepting managerial tasks. It also requires a system of individual appraisal of each member of staff, including the most senior managers who are submitting themselves to 360 degree evaluation. For an institution in which there was a very strong hierarchical culture, the fact that a generation of directors general has been willing to accept evaluation by groups, including their secretaries, is something of a cultural revolution.

To date, however, the test project we have undertaken to knock out as many of the bends in that as possible has proved successful. The first experience of career development reports affecting every official in the institution has had unexpected benefits, or at least benefits not anticipated by many of those participating. It has ensured a guaranteed requirement for dialogue between managers and all their staff and placed an obligation on managers to listen to the ideas developed by those who work with them.

The consequence is a definite and highly developed understanding that management in public institutions depends to a large extent on team leadership rather than on the assumption that seniority in a management hierarchy guarantees automatic obedience to decision-making. Modern organisations cannot be run healthily in that way.

There have been some difficulties, mainly attached to the allocation of merit points. As with just about every organisation, between 10% and 15% of people are outstanding or superb. The large majority of people are diligent and effective in their work and some others could do with support in the form of their being given extra inspiration. That pattern is found in the public and private sectors everywhere. The difficulty arises in how one decides the allocation of points among that huge majority because people can become demotivated if they get what they regard as an inadequate rating. There is also a risk of their becoming complacent because they get an excellent rating in the first exercise of the kind. I have no doubt we will resolve those problems in the coming years, just as they have been resolved in larger and smaller public and private organisations. The experience has been interesting and, on balance, productive because of the way in which it sponsored a different relationship involving teamwork and participation between people at all grades and those who have the duty and obligation of managing.

We now come to current events. Tomorrow, the European Union Civil Service will be on strike. I am against it, even though the decision to undertake the strike was based entirely on opposition to the Council rather than to the Commission; the strike resolution and notices say as much. It is not appropriate for the European Union Civil Service to go on strike for 24 hours, even on a Friday shortly before Easter. The first reason is that the negotiations in which we are engaged regarding the final reforms of the staff regulations are far from complete, though they will have been completed by 30 June. Second, the Council has not made the proposals of which it is accused. Third, it cannot have endorsed proposals that have not been made. Fourth, where proposals have been made by some member states concerning a radical alteration to the pensions regime, the Commission, in the negotiations - and specifically myself - have strongly resisted those proposals as being impractical.

The strike is about proposals that have not been made by the Council and, where they have been made by some member states, they have been strongly opposed by the Commission. Nevertheless, a strike is taking place. It is not, however, a strike against reform, changes in the career structure or alterations in the expectations of management, systems of promotion, the allocation of additional responsibility or anything of that nature. It is a pre-emptive protest strike against the possibility of radical change in the pensions regime.

I do not believe that such a change will take place. There will be some modernisation and, against the background of the Lisbon strategy and the policy jointly agreed by the member states, Parliament and the Commission of "active ageing", it is inevitable that proposals should be forthcoming with implications for the pensions system, but not without safeguarding and honouring the acquired rights and reasonable expectations of current members of the European Union Civil Service. The negotiations will conclude satisfactorily after some hard bargaining. The alarm and despondency generated in the lead-up to the strike are not warranted.

That is only one reason - and I could refer to a few others - for my antagonism towards the withdrawal of labour over the next 24 hours, but Members will get the picture. I have no wish to detain them any longer. If they have questions on those or wider matters that might concern them in the sphere of European policy, I will be happy to respond.

Chairman

I thank the Commissioner. Those were very interesting opening comments. I did not mention it at the beginning, but MEPs have the right to attend at the committee and participate fully in its proceedings. Jim Fitzsimons, MEP, is with us this morning. Deputy Mulcahy, Senator Quinn and Jim Fitzsimons, MEP, wish to ask questions, but I would like to ask one wider question first. The Commissioner did not refer to this matter, but it might help open the discussion a little.

In his documents the Commissioner mentions co-operation with the European Parliament and his efforts to keep it advised of legislative proposals well in advance. Clearly, with the Convention on the Future of Europe and the Intergovernmental Conference to follow, one country that will have to have a referendum is Ireland. We are somewhat chastened after our experience of the first referendum on the Nice treaty and we are quite determined to bring the issue to the people through the forum and through this committee. We are trying to address issues as far up the line as we can so that we can inform our Ministers and MEPs of the date in advance and in order that the people will know not only what issues are arising but that we are addressing them.

I notice that there are 25,000 civil servants in the European Commission, a relatively modest number in view of the work done. Even if there were 25 member states, all with active committees on European affairs - which there are not - if the Commission had some sort of formal relationship with them, it would help close that deficit. I know that the Commissioner is open to ideas and suggestions, and I would like to press the issue with him.

COSAC is examining its future role. As a small member state, we see the relationship between the institutions and between them and the members as a very delicate balance which we are anxious not to upset. However, I believe the Commissioner would agree that there must be some new constructive role for national parliaments. If the Commission could form a direct relationship with committees of this kind, where they are willing and anxious to do it, it would assist those committees in seeing what was coming. Even if there were 25 member states, there would only be 25 staff members to contact.

People ask what we would do if we had 25 commissioners. There is clearly a role for 20 commissioners at present, for all are very active. Perhaps the other five might be given duties regarding parliaments, bearing in mind that there shortly will be 25 national parliaments of member states. It will be more difficult for national parliaments to get the vice-president of the Commission to visit them because 25 of them will be inviting the officeholder from time to time. I thought I would throw out that as an idea. I would like to see a disposition on the part of the Commission to relate directly to committees, whether that be through alerting about possible initiatives earlier, through seconding staff or whatever. Perhaps the Commissioner might respond to that.

Deputy Mulcahy

I join the Chairm an in welcoming the Commissioner, Mr. Kinnock, who has been always fond of his visits to Dublin and has been always a great friend of Ireland when the occasion has arisen.

On the first point, the administration of the civil service and the officials in Europe in the Commission, in particular, this committee went on a study visit to Brussels in January and members were extremely impressed by the quality and professionalism of the people with whom we interacted at the Commission. We found it very interesting. I had been on a similar study visit four or five years ago and on this occasion I noticed a difference in the attitude of the people, which was more focused and professional than on my previous visit.

With Mr. Kinnock's permission, I wish to raise an issue that is a little bit off the area he has been discussing. However, it is rare that we get the opportunity to bend the ear of a Commissioner and the next few days and weeks in the Convention are absolutely vital. I would like to make two points in that regard. First, in terms of the election of the President of the Commission, there appeared to be three proposals on the table - electing the president by the European Parliament; election by the people of Europe; and, like our own governance proposal, an electoral combination between the European Parliament and the national parliaments. I think the two that are more widely canvassed here are the electoral college and Deputy John Bruton's ideas, expressed at the Praesidium, about a direct election by the people.

The Chairman mentioned the second Nice referendum. We all accept that when EU membership increases to 25, 27 or more, it could be almost impossible to have a 27 member Commission and, therefore, the Commission may have to be reduced in size. Our Cabinet comprises only 14 people and above that number it is very hard to get the dynamism of a team going. I would like the message to go back to Brussels that, as proposed in the Nice treaty, if there is a reduction in the size of the Commission it would be only on the basis of equality. In other words, that we have an equal right with Germany to a commissioner. If there is ever a proposal that we are to have a rotating Commission and if Germany is going to lose a commissioner in a particular year, Ireland is prepared to lose its commissioner the next year. Similarly, if Ireland is to lose its commissioner in a particular year, this must also be on an equal basis and with the understanding that other countries can also lose theirs. Without that sense of equality, we will disturb the institutional balance that is working so well at present and I do not think that will be acceptable to the Irish people.

My final point relates to the question of ultra vires and legality. It is proposed, and I think that we will see this in the new text, that there is going to be some yellow flag mechanism for national parliaments to send back messages to the Commission and other institutions that proposals are beyond the scope of the Treaty of Rome, as amended. Is there any mechanism within the Commission that checks this because, in some of our scrutiny sub-committee meetings, we have received proposals from the Commission that, in my opinion, clearly stretch beyond the bounds of the treaty? I do not think that is what the people of Europe want. They want clearly defined European institutions which act within treaties and which do not try to step over on the toes of national sovereignty. I suggest that, in the Commissioner’s reform, there should be some self-critical analysis of all proposals that the Commission is thinking of sending to the European Parliament, posing the difficult question as to whether this is intra vires the treaties.

Senator Quinn

I welcome the Commissioner. I am sure when he was offered the job of being in charge of administrative reform it sounded very dull and most unsexy. If I recall correctly, Sir Humphrey had a similar post in the TV comedy series "Yes, Minister".

Mr. Kinnock

He was Minister of Administrative Affairs.

Senator Quinn

Oh well, it is not that different.

Mr. Kinnock

He then became Prime Minister. Somebody seems to have changed the plot in my story.

Senator Quinn

I mention this because I am sure it did not sound interesting at all when the Commissioner was given this brief. He clearly is using all the right interesting terms. I am involved in business and one of the fears of business people is that companies do not just get bigger but older. The bureaucracy that develops smothers a company. One of the leading liquidators in Britain, Sir Kenneth Cork, wrote an article in response to a question about whether he could detect companies that were running into difficulties. He said one of the signs in a lot of companies that had gone into liquidation or receivership was that they had recently built a new head office and that a sure sign they were going out of business was if they put a fountain in the foyer of that head office. I am not sure about the Commissioner's new head office in Brussels, but as there is no fountain I think he is safe enough.

I have a concern about bureaucracy developing. The Chairman spoke about 25,000 civil servants and seemed to suggest that is not a very large number. I do not really know, perhaps it is not. The Commissioner has used all the right words in his documents, but he has used words such as "auditing", "scrutiny", "control" and "reviews". These words seem to involve checking up on whether others are doing the right job. This seems to be the administration and on top of that are further administrators.

I would like the Commissioner to put my mind at rest in respect of a particular question. Is there any benchmarking, any ability to compare with others, regarding how efficient is the European Commission and how efficiently the entire Brussels system works? I know we cannot easily compare it, but perhaps we can compare it with similar situations in similar places elsewhere.

The Commissioner has an unenviable task and I am very impressed, particularly when I hear about some of what he is doing in the areas of activity-based management and activity-based budgeting. He is using all the right words and doing all the right things, but I would love to know how this compares with similar situations in other places. Are such comparisons possible?

Mr. Fitzsimons, MEP

Céad míle fáilte to Commissioner Neil Kinnock. I have known him and his wife Glennis, who is a prominent Member of the European Parliament, for some years. I should be in Strasbourg this week, but I am on the injured list and was unable to fly. It is an ill wind that does not blow some good and I am here to learn, whether it is the Commissioner's wisdom or mine we are receiving. I suspect it is the Commissioner's. I thank him for his contribution.

When we talk about the Convention on the Future of Europe, we come to the problem Senator Quinn has mentioned about the Commissioner's portfolio not being particularly sexy. The trouble with the debate, which is so important, is that there is so much news in the world today that this debate is probably not receiving the publicity it should. It is not getting through to the people and the democratic deficit that has always existed is still there.

Next year I will have been a member of the European Parliament for 20 years. The Commissioner said he is retiring next year and I might even give that possibility some thought. There is a lot of speculation in the media here about who will run in the European elections in June 2004. It is time to declare whether one is a runner. However, that is coming up in the immediate future.

The work being done is very significant, and looking back over less than a half a century, it is amazing to see the achievements and the progress that have been made by the Commission, the Council and the Parliament working in their own disjointed ways because of the friendly - sometimes unfriendly - rivalry between them. I would love to be a part of the work that is going on at present in the Convention in regard to reforms to get some kind of common denominator or common trajectory in the enlargement process and the future, as the Chairman and others mentioned. I am not sure whether I will be there.

Many of the things Mr. Kinnock mentioned in his area of reform - modernisation, planning and training and promotion - may sound dull but are very significant. In the context of the ongoing work of the Convention, does Mr. Kinnock support the proposal to merge the positions of the External Relations Commissioner and the foreign policy chief, Javier Solana, at the European Union Council?

Deputy Haughey

Like other speakers I welcome Commissioner Kinnock to the committee and thank him for giving us the benefit of his views. I wish him well in his very comprehensive programme of administrative reform.

Senator Quinn is underselling himself. He is the owner of one of Ireland's leading supermarket chains and——

Mr. Kinnock

Word has reached us.

Deputy Haughey

——knows much about customer relations, which are at the forefront of his business policy. Can Mr. Kinnock tell us a little about the background to why this programme of administrative reform was put in place? He said the Council and European Parliament wanted such a programme to be implemented. Through the tabloid press, there is a perception in Ireland and elsewhere that the Commission tends to be over bureaucratic and inefficient. Will the Commissioner go into a little more detail as to why this specific programme was put in place?

There have been a few questions on the Convention on the Future of Europe. We had a very interesting meeting yesterday to discuss the Irish approach to institutional reform in the EU, with Deputy John Bruton putting forward his set of proposals on the Praesidium and the Minister of State, Deputy Dick Roche, putting forward his views. Obviously, there are various views being brought forward. For example, there are different views on how the President of the Commission should be selected. Deputy Mulcahy touched on this. How does the Commission engage with the Convention? Does the Commission have a view in its totality or do individual commissioners bring forward their views?

Chairman

Who is this Lady Penelope?

I wish to ask the Commissioner questions about the paper itself? The Commission has set itself a target of reaching agreement with the other institutions on an inter-institutional committee on standards in public life. What progress has been made on that?

It also states in the document that the White Paper will move forward that according to the timetable it has adopted. However, the Commission cannot achieve the action planned by itself because changes in legislation would be needed to revise the financial regulation and the European Union staff regulations. Are the legislative requirements in place?

The paper states elsewhere that to hit the target date it must count on the support and commitment of the Council and the European Parliament. Did the Commissioner get that support from the Council and the Parliament?

Mr. Kinnock

I will try to answer questions of fact first and then questions of opinion. I am grateful to the Chairman and members for their incisive questions that raise the basic issues.

On the inter-institutional committee on standards in public life, the Commission adopted its view in favour of it in April 2000. The proposal is that there will be a committee of independent persons with a degree of expertise comprising retired judges and people with distinction in public life from several - not all - member states. This committee will provide advice and judgment when issues concerning the exercise and fulfilment of ethical standards in public life arise, whether for members of the Commission, senior management in the Commission, members of the European Parliament or senior officials in the Council.

Sadly, I have to report that apart from the unanimous endorsement by the Commission, the issue has got stuck because there is a group - I am not sure if it is a majority or vociferous minority in the European Parliament - which does not want to adopt this inter-institutional committee. We have had many discussions about it and an assortment of explanations and proposals have been made. If further months elapse without the establishment of the committee, we will go ahead and do it simply for the Commission. This was number one on the action plan. It is part of the whole process essential to modern democracy of ensuring integrity is not just exerted but is seen to be exerted. While it is not in any sense riding herd on the conduct of public life in the EU institutions, it is a very useful adjunct to prompt and guide a proper course. The system exists in several member states, including the one from which I come. We have not modelled it on a pre-existing arrangement because we have particular needs to fulfil. By definition the EU is a collection of cultures, and while they do not clash, they are diverse and rich in their diversity. If we do not get agreement on the inter-institutional committee - agreement would be for the best - we will go on and have one that directly and solely relates to the Commission.

The proposal for amending the financial regulation to facilitate financial management and control change also brought about radical change in the accounting system of the EU. The initial proposals were put in July 2000 and supplemented in mid-2001. The legislative process in the Council and Parliament took two years and the necessary changes in the regulation were adopted last June. The new modernised, financial regulation came into force on 1 January 2003.

The changes relating to the staff regulations, necessary for modernisation and reform, are in the final stages of negotiation. The Council and the Commission agree that it is entirely necessary to conclude that process by 30 June 2003 at the end of the Greek Presidency. The General Affairs Council of 19 March adopted guidelines that are of great assistance in finalising this process. The May General Affairs Council will also have the matter on its agenda. We can be assured, even with some sweaty moments and burning the candle at both ends in May and June, we will get the amendments to the regulation that are necessary.

Wherever the rapporteurs on particular aspects of the reform came from and whatever the initial preferences of the political parties, the Parliament has been entirely supportive and constructive in all the work it has done on reform.

Two weeks ago, it adopted the reports on reform, all of which were constructive. It has not had the final legislative vote on it. For various reasons of parliamentary tactics, that has been withheld thus far. However, it is evident that there is a strong and persistent majority which is extremely supportive of the reform process, both in principle and in practical detail, and that is useful. The Council also has been supportive wherever its involvement has been required for reform. As I said, its last instance of exhibiting supportive, constructive, productive and co-operative attitudes must be manifested in the next seven weeks and I will greatly welcome its continuing to do so. The matter is being negotiated.

Perhaps I might turn to other issues that arose and deal with them as briefly as possible. My passions would dictate that I do not deal with them briefly, and that may become apparent in the next ten minutes, but I hope that I can do so. There are 22,000 Commission staff, but 25,000 people work for the Commission worldwide, including some who work as temporary agents, contract personnel and so on. Obviously, those people must be covered by the same standards as the European Union Civil Service, but their different status necessarily gives them different obligations and entitlements.

The figure of 22,000 is modest and lower than should be the case. European Commission staff are objectively and manifestly overworked and that is one reason for the development of reliance on technical assistance bureaux, known as BATs. While the majority of those providing the means of making up for the gap between tasks and resources were organisations and people of high professionalism and integrity, there was a loss in accountability and a weakening of management. Most of the problems that arose regarding a lack of integrity and transparency - and corruption - emanated from relationships in the efforts to close that gap.

I am not arguing that we ought to have more people to provide against potential dishonesty. We are at the point where efficiency is, though not reduced, jeopardised by our having too many people who must work too long for too many weeks of too many years. However, none of the authorities will come forward to offer us another 2,000 civil servants, except in the context of enlargement. In the period to 2010 there will be 3,900 additional civil servants in the Commission, whose employment will be directly related to the substantial additional demands coming from enlargement.

I will put that in context. This enlargement, with ten new countries joining the European Union, means a 66% increase in the number of member states, a 20% increase in population and an 82% increase in the number of languages used. The total increase in the Commission's staff will be 13%. That is, in part, testimony to the way in which we have been able to increase productivity and efficiency. If the reforms had not been developed and already put in place, there is no doubt that our objective requirement for additional staff would have been higher.

I will use languages as an example. Members can imagine the implications of an 82% increase in languages, including the complexities of needing to translate from Estonian to Greek, Latvian to Portuguese or English to Czech. The combinations of languages run into the thousands. The cost to the European taxpayer of providing that language cover will not rise. It is €2 per capita per year for the current 11 languages and it will remain so when we are dealing with 21 languages. That could not be achieved if we did not have the best translation and interpretation services in the entire world, which is an objectively measured fact. I did not give that background to blow a trumpet, but, since the European Commission does not come in for spontaneous commendation too frequently, when we have a good story about saving European taxpayers money, I ought to tell it.

I come to the question of establishing formal relationships with parliaments. First, it must be said that there is no inhibition among the college of commissioners or Commission staff in any department about relating, reporting or answering to any parliament in the current Union and that will continue to be the case. I would be interested in formalising the relationship. It would obviously be much better, first, if we had a framework in which there was common practice in all the democratic parliaments at least similar to the arrangement that you have established here and, second, if there was a network of such committees and institutions in parliaments so that there would be a degree of similarity in the democratic language used. If that were so, it would certainly facilitate a more frequent and open exchange.

If that stage was reached, formalisation would almost be academic, since the Commission's readiness to consult has always been well established. However, we have increased and intensified that so that we now have new stages of consultation for all our productions; not simply legal proposals, but Green Papers, communications of all kinds and White Papers. The step from what we are already very happy to do spontaneously to formalisation would be short and, whenever it took place, it would be welcomed as a way of manifesting the Commission's accountability. I will return that in a moment, if I may.

There is plenty of work for 25 commissioners, or for 27. We may have to come to a different view when there are 27, but I will give Members my view on that in a moment. The first reason for there being plenty of work is that there are certainly enough portfolios to go round. Second, if we understand that a commissioner's work is partly to head a department that has either horizontal obligations such as budget, administration, internal audit, an assortment of other obligations, or direct portfolio responsibilities for the environment, transport, research, industry, enterprise and so on, we will see that it is a substantial job in itself. In addition, a commissioner has to do a parliamentary job and Mr. Fitzsimons will recall how that role has evolved in an entirely praiseworthy direction.

The current Commission is willing to be more accountable more frequently to more parts of the European Parliament than ever before. That is excellent evidence of the evolution of the Parliament and the Commission. It takes up more time, but it is entirely welcomed by all commissioners. Third, there are the relationships that the Chairman mentioned in the member states. When commissioners have the time, of which they should be given more, they can be almost perpetual travellers, not simply to develop bilateral relationships between the Commission and the governments of member states - something critically important, especially in the context of the Council and legislative development - but also to be responsive to invitations from lay organisations and NGOs as well as parliaments. If everyone is doing that job to the full, 25 commissioners will not be enough.

It is not a matter of making work because it combines the obligations of managing a portfolio, exercising democratic responsibility to the Parliament and the Council, explaining - a fundamental function of the executive in any democracy - and mobilising, not in a politically partisan sense, but to promote understanding and confidence in the unique enterprise of the European Union. That the EU will nearly double in size and that ten countries, most of which have, unfortunately, spent most of their history outside democracy, means the obligations of invitation, explanation and advocacy will be greater in the next generation than has been the case to date. There is plenty of work to go round. It is work that commissioners, by definition, want to and do carry out. There are aspects of that work that could and should be further developed when there are more commissioners.

The question then arises about the leadership of the Commission. I come, therefore, to the question raised by Deputy Mulcahy regarding the President of the Commission. I may be in a minority of one, but I am utterly opposed to the election of the President of the Commission by any means whatsoever. The legitimacy of the Commission depends on objective factors such as the quality of performance, the level of real independence and the accountability to elected authorities, namely, the European Parliament, the Council and, I hope, other parliaments. The feeling, which is well intentioned and well motivated, is that the election of the president by Parliament or other means would add to the legitimacy of the Commission. It would not; it would introduce partisanship in the Commission. That would neither be the intention, nor the result at the outset, but the day would come when the Commission President would have to be responsive to the grouping that elected him or her. That would provoke those who are not of that political ilk in the Commission to respond to their partisan stimuli.

I am a socialist, a member of the Labour Party and the Party of European Socialists. I am never influenced by my party card when I sit at the Commission table, nor is any other commissioner. However, if the president owed his or her position to a partisan vote, the day would come when the Commission would be split on partisan grounds. When that happens - I say when, not if - independence would begin to die. If the Commission loses its independence, its fundamental reason for existence and justification as an executive administration of the European Union would begin to perish with it. I am not over-dramatising, that is the reality. If one says to an executive administration that it is not elected but that it must demonstrate, on a daily basis, its legitimacy by performance, accountability and independence, one will get a damn sight more legitimacy than the theoretically easier course of asking Members of Parliament to vote through their desks or even of asking citizens to put a cross on a piece of paper.

For a parliamentarian of 25 years like me, who intends to dedicate a large part of his retirement to fostering democratic governments in parts of the world yet to have them, it is a bit strange to say that election is not the best way of achieving legitimacy. In this instance, however, on the basis of rational assessment and eight years experience, that is the case. That puts me in something of a minority, but it has never stopped me making an argument.

The majority of the Commission - I respect the majority - has been prepared to say that it would favour the election of the president by Parliament, with a qualified majority of no less than two thirds and a secret ballot. I confess that I introduced that consideration. Since there was no chance of getting a majority for my point of view, I thought that we should take out as much insurance as possible against the possibility of partisanship. Anonymous voting by a qualified majority of two thirds in the Parliament is probably the nearest we can come to depoliticising the issue. I do not abhor politics because I am a partisan politician. I have beliefs which I have always tried to uphold. I was honoured to be elected to uphold those beliefs, but there are circumstances in which that is not enough. The running of the European Commission is one of these instances; there are not many others.

I wish to inform Mr. Fitzsimons that double-hatting, by the creation of a "Patlana" post or a "Solten" post, involving Chris Patten and Javier Solana, is inevitable. I hope it will work. If either Chris Patten or Javier Solana happen to be "Mr. CFSP", it will be fine. However, I do not like the idea that we are taking somewhat of a gamble on the precise individual qualities of a person because there is a danger of ultimately divided loyalties. Archbishop Wolsey said that a man cannot serve two masters and paid for that statement with his head. The two masters he tried to serve were God and Henry VIII - not a happy mix, it must be said.

I do not think that the problems will be as dramatic in terms of being a commissioner who is also the servant of the Council. However, the possibilities of provocation exist and the day will come when that person will have to decide whether to try to serve a vague majority on the Council in the prosecution of an external policy or rely on the more independent but clearer preferences of the Commission. The individual could be torn, which does not matter because one is paid for that in politics. More importantly, there could be a serious rupture between Council and Commission, with Parliament as one of the victims, simply because of the combination of the roles.

That possibility is obvious to everyone. A great deal of effort will be invested in trying to avoid that schism on any important occasion. There are personalities around, as Javier Solana and Chris Patten have demonstrated, who can embody a joint purpose. Given my total preferences, I would rather stick with something such as that which exists at present. If we are to have a permanent president of the Council, which I am also against for a variety of reasons, the need to maintain the degree of subtle separation - and it is subtle at present - will be even stronger. I can envisage a situation in which the permanent president of the Council will have to fulfil the very definite and clear obligation given to him or her by the majority of member states or by a qualified majority of member states in an area of external and security policy.

Working for the president may be Mr. CFSP, who will also be drawing his salary from the Commission. He will be subject, every Wednesday morning, to the expression of preferences by the President of the Commission and 23 other commissioners. The complexities and strains of divergent pressures arising from that will complicate rather than simplify and will darken rather than illuminate the functioning of the European Union.

We recall that the primary purpose of the establishment of the Convention in the wake of the Nice Summit was, first, to better explain to taxpaying citizens the purpose of the Union and what it does and, second, to discover whether there were any inhibitions to more effective working with 25 member states and, having discovered them, to suggest alternatives. Something that ends up with the complexity of a permanent president of the Council - a Mr. CFSP who is of the Council but in the Commission - is the opposite of clarity and explanation. That is my view. I am not suggesting it is a majority view, but that is the great luxury of being in one's last 18 months as a commissioner.

Reform, about which Deputy Haughey asked, has started. There are two reasons. One is an apparent reason and the other is the real reason. The apparent reason is the collapse of the Santer Commission and the swirl of allegations about corruption, fraud and misdemeanour of various kinds that eddied around that collapse. Of course, the committee of independent experts found something different. Having investigated the Commission for, in the end, eight months and produced two reports, the criticism it offered was that the institution had become overloaded and outdated because it was doing its policy role very well, sometimes brilliantly, but, as an organisation, it was, metaphorically, installing fountains at annual intervals. The fact that it was doing well in the policy sphere induced an unconscious neglect of the need to perform at a high level as a public service organisation. The result is not dirt, corruption and fraud, but outdatedness.

I am not "Mr. Clean Up", I am "Mr. Catch Up". In the course of catching up, we have installed mechanisms, systems, structures and work practices that provide much better safeguards against wrongdoing, misdemeanour and misuse of resources. While, in the past three years, we have investigated and prosecuted cases where there is evidence of wrong doing, the reality is that it is modernisation of this organisation in the service of Europe that was necessary and not some kind of cleansing hose down. That was a by-product and not a central necessity. The reform was essential, as the committee of independent experts saw, in order to catch up with the times and to be able to anticipate and embrace change and not because the Commission was encrusted with dirt. Far from it. The distinction is very important and objective examination demonstrates the description I have given to be true.

We have two commissioners who are permanent representatives on the Convention, Michel Barnier, one of the French commissioners, and Antonio Vitorino, the Portuguese commissioner. They sustain the Commission argument, which is fundamental and critical in my view, for the significance and importance of sustaining the community method as a way of building Europe.

The immense strength of the Community method, demonstrated for nearly 50 years, is that it is a hybrid. It is not rigid, it is a system which permits intergovernmentalism up to the time when the member democracies decide that it would be beneficial for them and for the Union to do things under commonly agreed law. The Commission is there to promote that process and to facilitate the proposals for law. Anything that was less fluid or elastic would be rigid and very brittle, but anything that was more fluid would be utterly incoherent and would fall apart. This has developed by accident, not by anybody's brilliant genius of design. The people who initiated it were geniuses and great modernisers, but they could not have anticipated where we would be 50 years later and they could not have anticipated the extraordinary success of the Community method.

Fundamentally, the Commission's argument is that we should, by all means, open up every pot, examine the contents and come up with new ideas but that we should not do anything that is going to weaken the community method as a way of going forward. It is evident that the Commission is central to this method and we make no bones about that. It is right in the front paragraph of everything we produce. I make no apology, nor offer any excuse for it. It is a fact. However, the important thing is that nothing that is done in the Convention, or subsequently in the Intergovernmental Conference, should impede or inhibit the operation of that relatively permissive but nevertheless coherent and progressive Community method. That is the Commission's line and it is argued most fluently and convincingly by both Michel and Antonio. Whether it impresses itself upon Monsieur Giscard d'Estaing one never knows. I will have to consult God before I can get a full understanding of all aspects of his logic.

When we reach the 27 member Commission, we will have a real choice. I believe in the fundamental reality and essential necessity of one member state, one Commissioner, no matter how big the member state. A giant like Ireland should have one Commissioner and so should a minnow like Malta. I hope that the committee realises that Ireland is about to become a big power.

The question of management then arises. Can an executive administration with, for example, 30 members of the college be managed? My answer is yes. I would have no reservation about that. Managing 30 people who have a primary motivation to make the thing work is not impossible. It is two rugby teams, as anyone who has been a referee will appreciate, although I know that a match only lasts for 80 minutes or, under new international conventions, about 89 minutes, and sometimes goals are kicked in the last minute. It is not managerial rocket science to get 30 highly paid, well-motivated people to kick in the same direction most of the time. As a managerial challenge, I do not think it is massive.

It has different implications. My view is, although I thank God I will not be there to have to make a judgment on it, that when we reach 27, the choice will be between rotation of some description and changing the nature of the Commission. I would opt for changing the nature of the Commission. Let us cut it straight out and go for an executive administration headed by nine or 11 people, regardless of from where they come, who will be there on the basis of evident merit. There would have to be other changes in the structure. We would have to avoid, for example, replacing the college of commissioners, with one member state, one commissioner, with the politicisation and nationalisation of the senior management of the European Commission.

What we could not have, either under rotation or change to a real executive board system, is compensation sought by member states saying, "We have not got a commissioner for the next five years so we will have the Director General of Competition". The first thing in that director general's mind will not be to serve the Commission but to serve the UK, Germany, Croatia or whatever. We must avoid the senior civil service management becoming a surrogate Commission. Remembering that this must be safeguarded against in all circumstances, an executive board would probably be the most direct, transparent and accountable of the arrangements.

A rotation system has many disadvantages. It would be inexcusable at this juncture for the current member states not to have one commissioner, not least because there is no country in the current Union where people dance in the streets at the mention of the words "European Union". For the incoming countries, which have only secured their democratic independence in recent living memory, the idea that they could enter an organisation where they were denied the certainty of one of their nationals sitting at the executive table is unthinkable. We must acknowledge those realities at all times. That will be a permanent necessary requirement of accountability. The day will come when a choice has to be made. My preference in those circumstances would be a Commission which is an executive board of nine or 11 people appointed on evident merit and not because of any particular representative status.

There is already a kind of yellow flag system. As a result of the additional acuteness of understanding of the need to not spill out of the treaty, there is a much stronger self-discipline coupled with the process of reduction of European product. For example, the amount of proposed legislation at the end of the Prodi Commission will be 25% lower than it was when we started. There is a conscious effort to reduce the bulk, increase the quality and massively extend consultation with democratic bodies, NGOs and so on. That betokens a real sensitivity to not wanting to offend against subsidiarity but to strengthen it. There are aspects of policy which we have already suggested for renationalisation. They are not enormous, but they are things that can be done better at member state or regional level.

We can intensify and further develop that without becoming too formal about it. It would, in my view, be impossible to install with the necessary combination of authenticity and flexibility in a new treaty. We must, therefore, do it in a very British fashion by a pragmatic process where we safeguard, at all times, the intention of the Commission not to spill out of the treaty, but also allocate to the invigilating bodies, whether national or European parliaments or a combination of both, a real vigilance about not allowing the Commission to spill over the lines and, where it does do so, to blow the whistle and send it back. That can be done.

Senator Quinn said that we are using a lot of checking words and I take his point on that. The necessity for that, in this generation of change, is that we have to be in a process of changing structures and systems in a way which is vital in any organisation when one wants to change culture. It is evident to everyone that culture in an organisation is not something taken in with mother's milk. It does not necessarily come with a flag or a passport; it is bred by the custom of the organisation. If one wishes to change culture, and that is our declared mission, or part of it, one has to change the structures and systems. To do that, one has to install the changes and check, monitor, counsel, set targets and insist on the maintenance of those targets all the time.

That is not oppressive in its effect, but it can appear to be oppressive and stultifying. The Senator is correct, that is the last thing we want. We want to stimulate a genuine public enterprise spirit, a public service consciousness, a client orientation. We made a lot of changes and we can show evidence that this has occurred. We have radically reduced, for example, the payment times for those who have been contracted to the European Commission from an average of more than 64 days in 1999 to 44 days or less now. We have also made many other changes.

We have also sought to introduce responsibility, which is does not bear down on people but which is a fulfilment, a way of making of them enjoy a job more because they are more in charge of the territory of their decisions. We use that in our training regime and everything else and also in the encouragement of candid self-appraisal. People have never before been asked to do that. They are a little blushing and diffident about doing it. We are trying to inspire genuine change in culture, getting people to set their own standards and then going through a system of appraisal to see whether they have reached those standards and getting their recognition of whether they have reached those standards, exceeded them or fallen short of them. That is the most effective way of trying to encourage an outward looking sense of accountability in the discharge of public service work.

If we had bottom lines and stock prices, it would be easier, not guaranteed as Senator Quinn pointed out in his illustration, to say what performance is and how all the component human parts of that performance are fairing. We do not have bottom lines or stock prices, we are a public service which is unique. We are international, accountable and permanent in a way that even other public sector international bodies such as the IMF, the World Bank, the United Nations and the OECD are not. A benchmarking which compares us with them is not helpful because we are much better.

We need somebody better than us. We can then take their benchmark and strive towards it. I have to say, without any arrogance, all the objective tests used demonstrate that we are better. That gives the committee some idea about the others. Either we are better or they are so small that we cannot really compare because we are talking about hundreds of people. In our case, we are talking about more than 20,000 people using 11 languages from 15 democracies, soon to be 25 democracies. We have had different challenges. We, therefore, look to other public administrations with comparable obligations, although none really exists. We looked at the system of accountancy and structures of management of the federal service in the United States of America and we were asked how we do it. Even the federal government system in that country, which is bigger and older than us but does not have the same challenges of multicutural and multilingual obligations, says we are better.

We have to grow our own, which is why we have so much establishment of standards, checking, monitoring, chasing as well as the allocation of individual responsibility and the use of self appraisal. When we get as good as we should, we will set the benchmarks.

Chairman

I thank the Commissioner for his enlightening and powerful contribution and for giving of his valuable time. This has been one of the most interesting meetings we have had for some time. The Commissioner has put a different perspective on some of the institutional questions to those we received previously. It is good to hear that balance.

Mr. Kinnock

I am in a minority.

Chairman

I am often in a minority. I thank the Commissioner for a useful meeting. We greatly appreciate his time and look forward to meeting him again at some stage during the remainder of his period in office. He is always welcome here.

Mr. Kinnock

I thank the Chairman for his kind remarks.

The joint committee adjourned at 1.30 p.m. until 2.30 p.m. on Tuesday, 15 April 2003.