Mr Thorn, President of the Commission. —(F) Madam President, ladies and gentlemen, a monthago I stood here to introduce the new Commissionand in accordance with your wishes we agreed to meetagain today for a more thorough discussion of policyand programmes.

Who could have imagined that scarcely a few hourslater one of the pillars of the Commission, Finn OlavGundelach, was to leave us for ever? Thus theCommission found itself faced with new and difficultproblems. Tribute was paid to our colleague in thisHouse, so I will not re-open the wound but simplyremind you that within barely five years he is thesecond Commissioner who has been unable to finishhis term, both being struck down in Strasbourg after alast appearance here.

I must also say that the Danish Government actedswiftly on our request and very quickly appointed

Poul Dalsager, its Minister of Agriculture and Fish-eries, to complete the term of our late friend, FinnGundelach. The choice was promptly ratified by theMember States and the Commission, after consideringall the possible solutions and weighing the pros andcons of each, decided to give Mr Dalsager the agricul-ture portfolio and let Mr Kontogeorgis take over fullresponsibility for fisheries, as had been planned in anycase.

That is all I shall say in presenting our new colleague.Firstly because you already know him well enough as aformer Vice-President of this House and because, likeMr Kontogeorgis, who was the first to appear in thefront line of the very heated discussions at a Councilmeeting on fisheries, Mr Dalsager will soon beappearing before you to defend, at what is a particu-larly critical juncture, the agricultural prices for thecoming year.

Madam President, ladies and gentlemen, you havebefore you the Commission's Work Programme for1981. This paper is to some extent the first of its kind.Given your future role, the new Commission felt thatit was preferable to let you have a few pages of ourpriorities which would give you food for thought,rather than the customary memorandum annexed tothe no less customary programme-address, which wassimply a list of all the activities to be undertaken by theCommission.

So as not to take up too much of your time byembarking on a lengthy and pointless survey of afour-year programme and of priorities for the nexttwelve months and also to avoid any charges ofneglecting political nuances or comment, mycolleagues and I decided that we would simply lay ourprogramme before you. Of course we are here tosustain the debate on all the points covered in Jiispaper and those which you choose to raise. I shall nowbriefly, I hope, present the programme and make somecomment upon it.

As we step into 1981 my task, I know, is a dauntingthough enthralling one, and for two reasons: onebeing European and general and the other particular,Community and institutional. Let me take the institu-tional one first.

My Commission is the first to appear before adirectly-elected Parliament. Believe me when I say thatthis new situation is crucial. His Excellency PresidentSadat came here to address you yesterday, and thatsays more than any lengthy speech of mine about theimportance of this House and the eminent role, indeedthe eminently political role, it will have to play.. With apolitical and democratic base deriving from yoursupport and powers of control, the Commission owesit to itself to be more responsible and watchful in itsrelations with Parliament. These new, unaccustomedworking conditions, to which I will return later, willhave an enormous influence on the institutional

future, not only yours and ours but also that of thewhole Community. They will compel the Commissionto give a more detailed account of its stewardship, pastand future, and force it to pay particular attention —you have my word on this — to your criticisms andsuggestions. When I spoke to you last month I toldyou that I felt our collaboration to be of paramountimportance: I have since made a point of confirmingmy views in writing to your President.

The second daunting aspect of our task is, alas, thatnever before have we had to set out priorities against abackground that was so gloomy in the short term andso uncertain thereafter. The Community — indeed theworld — has never, you will agree, been in such aparlous state. It is ailing. Not just economically, orsocially. It is ailing, period, as you have frequentlypointed out.

And the people of Europe, disturbed by the increas-ingly frequent reports of our society's i l l s , are fright-ened and are no longer giving the Community thetrust it deserves and desperately needs. But I willreturn to this later.

My particular concern today is to sketch the outlineand highlight the particularly significant points of thenew Commission's plan of action for steering Europethrough the hard times ahead. You are better placedthan anyone to realize that our success dependsheavily on the political support we get. Every day inour work we shall be asking for that political supportfrom the governments of the Member States; today weare here to ask it of you on this particularly specialoccasion, but it is above all through you and beyondyou that we are seeking it and indeed we must obtainit from the peoples of the Community, the men andwomen who elected you.

As to the background, we must recognize that thedevelopment of the world situation holds little comfortof Europe. It is best described as the aftermath of aseries of conflicts, the most glaring of which have beenbuilding up for the last few years.

On the political scene it is clear that detente has takensuch a beating in recent months that the term itselfseems obsolete and a replacement is being sought. Theworld situation now is more worrying than at any timesince the Cold War. The invasion of Afghanistan was afur ther turn of the screw. A war between Iraq und Irancoming on top of a revolutionary change of regime inIran and compounding the Israeli-Arab problem withthe Palestinian dilemma and its Lebanese repercus-sions, all this is making the Middle East moredangerous than ever, despite all the hopes raised bythe courageous missions President Sadat undertook sorecently. Africa is the prey of covetous eyes and wide-spread unrest. Latin America is in the grip of new andmurderous internal conflicts, and in Asia, apart fromthe invasion of Afghanistan, daily happenings are acruel reminder of the tragedy of our times.

In addition to the events which by their harsh brutalitymake the headlines, there are a number of questionmarks over the international situation. The fate ofEurope, and in particular its influence, will depend,whether we like it or not, on how the new Americanadministration views the future of East-West relations.The serious threats to world peace directly involveEurope. Their repercussions, and it is in terms ofrepercussions that they most trouble us today, maymake nonsense of our efforts for integration. Indeed,the bouts of fever raging on the fringes of WesternEurope make us constantly aware that Europe is stillin the middle of the hotbed of tension between Eastand West. So we, the people of Europe, have a role toplay as custodians of world peace, not only forourselves but also in terms of the alliances some of ushave contracted and various commitments we haveentered into all over the world.

On the economic front there is no point in mincingwords: the prospects are particularly bleak. We are inthe trough of a protracted crisis, a structural crisis; weare trying hard to live with it; but have yet to learn toovercome it and control what some people, includingmyself, have no hesitation in describing as a change ofcivilization. The cards are being redealt at world level.The development, meaning the expansion and oper-ating conditions, of world trade is at risk. There areclear signs of a widespread return to protectionism.This is particularly disquieting for the Community,which, as the world's leading trading power, needsfree and expanding trade for its very existence. Thecollapse of international trade, meaning its fragmenta-tion, its restructuring, would be a body blow to theCommunity. It is all too clear that the impacts wouldnot stop at the Community's outer borders but mightwell threaten to jeopardize the very existence of theCommon Market, the name by which so many knowour Community. With these dark clouds looming overus, may I simply remind you by way of example and asa call for solidarity to the Member States that theunbalanced development of the Community's tradewith a major partner like Japan is a source of seriousconcern.

We must not forget that apart from the general slow-down in economic growth the Community has anotherweak spot in that, more than any other big economicgroup, it has to import the bulk of its energy and rawmaterials. In 1980 the Community countries ran up anoil bi l l of over a hundred thousand million dollars.With the exception of the United Kingdom and theNetherlands, Community countries, with Japan, arethe most heavily dependent on external supplies. Thishas far wider consequences than are usually imagined.We must remember that even Europe's agriculture —which keeps the Community self-sufficient, or insurplus as some critics would have it — is heavily-dependent on imported oil and raw materials. Twentyyears ago, when I was sitting on your benches, Parlia-ment was worried about our energy future, notwith-standing the initial enthusiasm generated by Euratom.

The 1973 crisis has sadly not taught the signatories ofthe Euratom Treaty the need for increased solidarity.Let us hope that our energy bills, which will keepgoing up and up, and our meagre rates of economicgrowth will prompt us in time to change our ways.

Because of its dependence the Community could actu-ally see its share of world trade shrink from 20 % to15 % over the next decade. The main beneficiarieswould be Japan and certain 'go-ahead' developingcountries.

The worsening economic climate holds a further perilin that it could undermine the efforts that the Third"World countries are making to develop, thus harmingthe interests of our potential customers, widening thegulf between nations, heightening tension andreducing some countries to famine and despair with allthat can mean in political terms. The urgency of theseproblems and the growing realization that thenorthern and southern hemispheres are economicallyinterdependent highlight Europe's special responsibili-ties here. To speak of this problem is to define ourresponsibilities, what we can do, the role we must play.

To take a different, but related, line of thought,anything which disrupts our monetary system canmake our forecasts and forward calculations obsolete.Here, as elsewhere, the dangers inherent in any freshupsurge in prices are so great that we must perseverein our efforts to re-establish stable and universally-recognized monetary relations. No one can doubt thatEurope has played, and will continue to play, a crucialpart here. While I realize there is nothing to be gainedby rushing our fences, I cannot accept that we shouldshy away from them either. My feeling is that in theface of our present difficulties we must advance, all tentogether, lest we see our economies continue to movefurther apart and thereby jeopardize what theCommunity has achieved.

Is there any need to mention the consequences for theCommunity of a declining population and of theeffects — of which so many Europeans feign igno-rance — on the labour market, economic activity,social innovation, political life and Europe's place inthe world? If the present trend were to continue, thepopulation of Germany, now some sixty-one million,would fall to a mere forty million or so by the year2050. If Europe's present birth rate continues beyond1990 Europe will be on the brink of extinction indemographic terms. Europe would be the only regionof the world with a stagnant, declining or at leastageing population. History has shown us thateconomic and demographic change frequently gohand in hand. I am afraid that a declining, ageingpopulation may reduce our capacity to adapt andinnovate, reinforce the Malthusian pattern and makethe dialogue with young, prolific nations even moredifficult . The main concern of some nations will betheir children, while others may have to devote them-selves to the care of the elderly; some will be

concerned with maternity homes and nurseries whileothers, meaning us, will be running intensive-carehomes for an older and older population. The patternof research and the economy and the choice betweeninvesting in new industries and propping ageing onesmay well depend on the outcome.

Turning now to the Community, we can clearly seethat all is not well. Let us reflect a moment, as seriousand informed politicians, and consider what the posi-tion of our countries would be without the Commu-nity.

There were those, not so very long ago, who claimedthat Europe was the last of the great myths. No one ofmy generation or the generation before who witnessedthe butchery of the First World War, the GreatDepression and the rise of Fascism in the thirties, theslaughter and atrocities of the Second World War andthe myriad sufferings it generated, would dream ofdoubting the intelligence, generosity and courage ofthose who have worked so tirelessly since then forEuropean unity.

Can anyone deny the cardinal role played by theEuropean idea in bringing about Franco-Germanreconciliation, the reconstruction of our continent, theremoval of internal European frontiers and theopening up of Europe to the world, the unprecedentedeconomic and social recovery of the late fifties andsixties? Not only is it the first time that 35 years havepassed without the countries represented here todayclashing in armed conflict but also — let me say it loudand clear — the first time that not one of our250 million people contemplates even the possibility ofsuch conflict. Surely that alone makes it worthwhilegoing all out to consolidate our achievements ratherthan thoughtlessly running them down?

(Applause)

Today our Community appears as a haven of peaceand order in a world where, as events in Iran havemade abundantly clear, lawlessness may take overfrom the rule of law. Despite its imperfections, ourCommunity can still serve as an example of democracyto others. In this respect its image abroad, I regret tosay, is more attractive than its image at home.

The Community today is still a busy trade centre,accounting for 33 % of world exports overall and40 % of all manufactured goods exported. It is themain trading partner of the rest of Europe, the MiddleEast, Africa, Australia, New Zealand and EasternEurope. Naturally the objectives of Communitycommercial policy are shaped by this situation and ourCommission will make a point of setting up, in agree-ment with the governments, a truly common policywhich will serve their best interests. Together we are aforce to be reckoned with; alone even the strongestamong us is vulnerable — enslavement and destructionwould be ultimately inevitable.

With the international monetary system in disarray,the advent of the European monetary system in 1979gave Europe a measure of monetary stability whichhas helped to reduce tensions between the economiesof Europe. But the significance of this lies, above all,in the future; what was true yesterday is true todayand will still be true tomorrow. Today the big blocs fixthe odds and only they can afford to play for thehighest stakes. We tend to forget, when speaking ofthe United States and the Soviet Union, that it is the'United' in United States and the 'Union' in SovietUnion that give these countries their formidable polit-ical and economic might, not to mention the ArabLeague, the Islamic Conference, the OAU and somany other organizations.

Perhaps we should question the motives of those whoare swimming against the tide of history today,opposing those who are anxious to quicken the paceand enlarge and strengthen our Community.

I fail to understand how — at a time when a Latin-American Common Market has just come into being,when certain black African and Maghreb countries aretoying with the idea of economic and political union,when ASEAN is beginning to emerge as an economicand political force to be reckoned with — somemembers of the Community — and not the leastamong them — can question its value and argue infavour of a more 'flexible' or rather looser, associa-tion.

If you have followed my arguments so far — andsurely no one can deny the truth of the picture I havepainted — then why is it that Europe has such a poorimage within the Community almost thirty years afterthe ECSC Treaty was signed? Where, for example,would the steel industry be without the Community?No doubt we would be squabbling among ourselves,and where would that leave us? Would we have madeany more progress on energy policy? Would there be awider regional policy? Would agriculture cost anyless? I am sure it would cost more. Would we, indivi-dually, be able to play a major role in the Middle East,Asia and Africa? Would any single Member State haveachieved a Yaounde or a Lome Convention? Wouldany of our members have been able to wrest balancedagreements from the United States and Japan single-handed? Or to take a final example, could any one ofus play a decisive role in the North-South Dialogue?The answer is implicit in the questions themselves.Why, then, does Europe have such a poor imagewithin the Community? We are all to blame: ourgovernments, the man-in-the-street, the Commissionas the Community's executive, and you as the electedrepresentative of the people of Europe.

The initial confusion arose from identifying Europeanintegration with the golden age of prosperity andopportunity which marked its first fifteen years. Every-one welcomes this Europe of plenty, with annualgrowth rates in double figures — which today we

would enviously term Japanese proportions. Thencame the hostility of many politicians, who were onlytoo happy to attribute all their ills to the Communitybut were quick to claim the credit for any benefits.

(Applause)

The fact that the Community is rarely, if ever, somuch as mentioned by our political leaders in theirpublic speeches says a lot about the mentalities theycreated before becoming their captives and then theirvictims in their own turn. Inevitably the man-in-the-street feels that the Community is remote from him,and we must all work together to do something aboutthis. But then the man-in-the-street can hardly beexpected to feel involved when his immediate prob-lems are overlooked. By failing to mount a campaignto explain Community action and promote under-standing between Community citizens, we have know-ingly created the climate of indifference, if nothostility, discernible among a sizeable proportion ofEuropeans.

What this Commission wants to do — with yourassistance — is to make every citizen of our Commu-nity realize that we are sensitive to his problems,whether they concern employment, social policy, oldand new industries, agriculture, fisheries or the profes-sions. Every citizen of Europe can criticize ustomorrow as he did yesterday, but never again can hebe allowed to claim he doesn't know who we are orunderstand what we are doing.

(Applause)

Of course this is not a Defence Community — and weknow why that is — nor is it a Political Community;our Community is essentially economic, and yet whocan claim in today's world that these elements can beseparated from each other? After thirty years of inter-action who can say that the economy is not athoroughly political phenomenon? And so, while wewill comply fully with the Treaties — the Commissionis their guardian — the fact remains that if we wantour Community to be a success and if we genuinelywant to achieve European Union, we must notdisperse our efforts. We must stand united againstthose who would divide us and work for EuropeanUnion based on the existing Community institutionswhich have shown their mettle.

While we are on the point, I would venture to suggestthat the procedural arguments which are claimingyour attention at the moment are of little interest toyour constituents. For one thing they have become fartoo subtle and consequently lost their mass appeal; foranother, the citizens of Europe have far too muchcommon sense to accept that our so-called Europeaninstitutions should be fighting each other instead ofpooling their efforts to build Europe.

(Applause)

This infighting makes the Commission's hair stand onend, and we will do everything we can to get the insti-tutions working together properly. To put it bluntly,familiarity breeds contempt. People have grown accus-tomed to the Community but have failed to under-stand, or have frankly forgotten, its political aims. Wetend to imagine that the Community can comethrough every crisis unscathed and overlook the factthat its essence is being steadily eroded!

Today Europe, if you will forgive the metaphor, is arather ramshackle house. Its roof has been blown awayby disunity. There is no heating, since energy is inshort supply. There is no architect, since the genera-tion of founding fathers who supervised the buildinghas passed away. The builder is on the verge of bank-ruptcy, his resources virtually exhausted. The garden isstill reasonably presentable, but is costing more andmore to maintain. The tenants are at their wits' end —so many of them are out of work while other potentialtenants are knocking at the door.

We are aware of the problems facing the people ofEurope, especially young people, women, and theunfortunate victims of unemployment, insecurity andthe aggression of modern life.

As far as the young — that fortunate generation thathas never experienced war — are concerned, the newCommission intends to anticipate their demands, getto know their problems, and, above all, speak theirlanguage so as to give them new hope.

As far as women are concerned, Community legisla-tion and Court rulings have of course blazed a trailtowards equal treatment. I admit that much stillremains to be done. Personally I and all the othermembers of my Commission regret that our institutionconsists entirely of men, though the fault is not ours.The Commission is after all a feminine noun in mostEuropean languages. The blame for this lies not withthe Commission but with the ten Member States.

Ladies and gentlemen, I can see no alternative. Wehave no choice. There is no point in trying to createEurope from nothing, for we have been working on itfor thirty years already. As for the challenges beforeus, you may well ask where we are to start. Well,frankly, we must take up all the challenges before ussimultaneously. The priorities before us flow inevitablyfrom challenges from outside and from the commit-ments entered into by the European Council andprevious Commissions. The task facing the newCommission is to revitalize Europe — a Communityof Ten today, a Community of Twelve tomorrow. Andso, what we want to do today is to give you some ideaof the approach and principles that the new Commis-sion will follow during its term of office.

Our most pressing task, then, is to find new ways ofmeeting the challenge of the eighties withoutdeparting from the objectives set out in the Preamble

to the Treaty, which I took the liberty of runningthrough with you less than a month ago. There arefour preconditions for this:

Firstly, current policies must be adapted to newdemands; safeguarding what we have achieved,though essential, must not be allowed to lead torigidity. Secondly, the respective competences of theCommunity and the Member States must be clearlydefined. Harmonization for its own sake and thepooling of resources at any price can be counterpro-ductive. Thirdly, priorities must be reviewed regularlyin the light of what can be done and what needs to bedone. A Community that does not live in the presentwill end up by losing all credibility. Fourthly, thepolicy-makers must adopt a new approach of treatingco-existent problems as a unit. But, let me repeat, themain aim of the new Commission, guided by the prin-ciples I have just set out, is to restore confidence in theCommunity by getting closer to grips with the realproblems, by which I mean the problems which areuppermost in the minds of our citizens.

To respond to their justified anxieties the Commissionwill make every effort to obey three fundamental,closely-linked imperatives. The first is to make moreeffective use of available resources; the second is soli-darity; and the third is to offer the people of Europegreater security.

Making more effective use of resources means that wemust first re-examine current Community policies. Asyou know, the Commission gave an undertaking lastyear to set about solving the budgetary problemswhich are a serious threat to Community cohesion.This was to be achieved through structural adjust-ments and would follow the guidelines laid down bythe Council on 30 May 1980. It has been argued thatthese guidelines are virtually irreconcileable and thatthis makes things rather difficult for the Commission.Be that as it may, the Commission has been reviewinga number of Community policies and it will present itsfindings to the Council and this House before July.

Before I come to the great problems of the day, or atany rate a few examples, I should like to make onepoint. I cannot accept it as an article of faith that thecurrent ceiling on budgetary resources is sacrosanct.

(Applause)

The argument is a theological one, based on a narrow,mistaken philosophy. If it becomes more deeply rootedstill in Community soil it is going to create enormousdifficulties, especially for those who originally devisedit. Our citizens have often paid dearly for the progress,stability and freedom of our Member States and forthe unity of Europe. Indeed they have frequently paidwith their lives, so let us be realistic enough to recog-nize that we cannot build Europe from the comfort ofour armchairs.

There can be no question of trying to make a 1 %Europe, nor even a l/2 % Europe.

(Applause)

Be that as it may, if we accept that we must pay theproper price for Europe, I am quite willing to agreethat the Commission should concentrate first andforemost on clearly-defined priorities, that it shouldcut back activities in certain areas to release energiesand funds for tackling what I have called the realproblems. My temperament and my convictions tell methat what is needed now is a concentrated burst of firerather than random sniping. And let me say verybluntly that if you and I wish to set ourselves up asresponsible politicians we must understand that intoday's circumstances any new financial effort inevit-ably entails a sacrifice and more than ever we mustdeserve it, we must be able to justify it and if necessarywe must begin by making savings where we can.

Obviously the common agricultural policy, by far thelargest budget item, will be at the heart of our review.The gap between agricultural spending and spendingin other areas — I won't say 'policies' — is far toowide and must be adjusted. I specifically say adjusted,because there can be no question of abandoning theonly real common policy we have. Europe needs astrong agricultural industry, and the mandate given tous last year states explicitly enough that the funda-mental principles of the CAP are not to be touched.No. What the new Commission intends to do is to reinin the runaway growth of farm expenditure, in linewith the reflections sent to you at the end of last yearand the basic principles governing the common agri-cultural policy. It is unfortunate that the absence ofany effective mechanism for keeping agriculturalspending within bounds has cast doubts on the sound-ness of the policy itself and brought those who gainmost from it into disrepute. Starting this year the newCommission hopes to be able to inject new life into thepolicy by involving farmers in its management througha co-responsibility mechanism but continuing to offerguaranteed incomes to the eight million people whowork in this vital sector of the Community economy.The price proposals for the 1981-82 marketing yearare ready and Mr Dalsager will be giving you furtherdetails next week. I do not propose to give figuresnow, but I will say that our proposals do not anticipateour response to the mandate given us on 30 May 1980.

The second area in which increased effectiveness is animperative that I submit to your vigilance is the adap-tation of our industrial apparatus to the demands oftoday's world. Non-intervention by Europe here couldhave appalling consequences, particularly in the polit-ical and economic context I have been talking about.As you know, increased industrial competitiveness is aprecondition for a return to full employment inEurope. We need only think of the steel crisis torealize how disastrous failure to act at Communitylevel would have been. The Commission is often very

unfairly criticized. We, like our predecessors, willresolutely promote the adaptation of production struc-tures to relative energy and labour costs and tochanging patterns of international demand. This is theprice of success. It must be realized, however, that theback-up policies the Commission will adopt to supportnational restructuring efforts, public and private, mustnecessarily be compatible with the vision of a genuinecommon market. In no circumstances can they lead toa consolidation of the national patterns of productionor the re-establishment of preferential markets. TheCommunity is not just for lame ducks. It can and mustface the challenges of the future. One of the newCommission's priorities here must be to promote newtechnologies. Our aim is to work out a strategy thatwill meet every aspect of the challenge that advancedtechnology offers our society and our industry. TheCommunity is lagging behind, and it is time it caughtup. A strategy based on this or that individual industryjust will not do. The new Commission will seek tocreate conditions that will be conducive to industrialdevelopment, better training and coordinated scientificresearch. It will stake its claim in the area of innova-tion and research since this is the only way to ensurethat the Community will come through the presentwave of structural upheaval.

You know that this vast process of adaptation dependson the willingness of companies to take some risks andthe willingness of workers to accept greater mobility.This implies that all must be prepared to shoulder ashare of the inevitable burdens and sacrifices.

The Commission's second imperative will therefore beto develop policies inspired by the spirit of solidaritywhich underlies our whole endeavour, a spirit whichmust reign both inside and outside the Community.

The need for greater solidarity within the Communityis becoming more and more urgent as the employmentsituation worsens. It can no longer be left to so-calledback-up policies. To my mind solidarity cannot bedescribed in terms of mere figures.

Today, more than twenty years after the Treaties ofRome were signed, we are forced to admit that theCommunity has failed to reduce regional disparities.There is an undeniable gap between the Communitycountries, but then similar gaps can be found withinthe borders of most of our countries, which is why itseems wiser to talk about disparities between theCommunity's regions rather than its Member States.

I need hardly stress here that if the Community fails tobridge this gap it will be faced not only with the prob-lems arising from the malfunctioning of the internalmarket but also with the growing frustration that iswidely felt in our society. This could do untold harmto its image.

For this reason the new Commission must convert itsconcern for greater convergence into immediate action

by adding to the Regional Development Fund's finan-cial weaponry and fixing its sights on new targets. Itwill seek genuine cohesion in the various Communitypolicies.

Social and employment policy too must be reappraisedin the same spirit of solidarity.

The new Commission shares your deep concern at therelentless growth of unemployment, which has nowsoared beyond the eight-million mark leaving the equi-valent of Europe's entire agricultural workforce out ofa job.

We all realize that a situation in which young peopleaccount for 42 % of the unemployed is bound to exertintense pressure on the fabric of our society. Let mesay clearly, in this House, that we cannot afford tosacrifice this potential which is, make no mistakeabout it, Europe's future. For these are the very peoplewho, tomorrow, will have one of two options: to makeor break Europe.

(Applause)

Faced with this intolerable situation we must makemore selective and telling use of the powers at ourdisposal and, what is more important, do it quickly. Iwon't go into any detailed explanations at this point.Suffice it to say that the time is now past when theonly concern of each of the Member States was to getthe Social Fund to provide 50 % of its expenditure onprogrammes — admittedly often very necessary — ofnational interest.

The task has assumed such enormous proportions thatthe Commission will have to find a way of pursuadingall concerned to get round the table and hammer out anew social and employment strategy acceptable notonly to those called upon to implement it but also tothose who will bear the consequences. In my viewdevelopments affecting the quality of life, workinghours and industrial relations are all suitable topics forjoint discussion. Social policy cannot be limited to thefight against unemployment.

A final thought in this connection: the new Commis-sion is fully aware of the need to involve both sides ofindustry not only in its social policy options but inother areas too.

But, as you all know, the authors of the Treaties didnot the want policy of development and progress in aspirit of solidarity to be confined to the Community. Ifour development policy is to remain a success andfulfil the original role defined in the Preamble to theTreaty, it must be more closely integrated with otherCommunity policies. Only in this way can we reap thegreatest benefit and get a clearer picture of the impli-cations of our action. This new approach will have tobe devised and subsequently applied with the activecooperation of all concerned in our countries and,

more importantly, the direct involvement of the devel-oping countries themselves. I agree that the Lome IIConvention is our proudest achievement in this fieldbut matters do aot end there: you all realize howimportant it is for us to remain open to the wholeThird World.

Clearly, if the Community wishes to inject a politicalelement into this dialogue with the less-favourednations of the world, it must take part in all in-depthdiscussions of the North-South problem. Its record onthis front has always been, and must continue to be,exemplary. World economic recovery is at stake; theCommunity cannot opt out — it has a duty to itselfand to the world as a whole. This is the spirit in whichwe are already making our preparations for theOttawa Summit.

Our current dialogue and cooperation with the devel-oping world is not inspired by charity. Given theincreasing interdependence of our economies thesecurity of all is at stake.

This brings me to our third imperative, no less impor-tant than the first two, namely the quest for security.

The disquiet shared by many of you revolves aroundthree basic problems: firstly, the security of our energysupplies, secondly, the threat to our position as theworld's leading exporter and, thirdly, the strategicimportance of strengthening our ties with the Mediter-ranean countries.

Let us look at energy supplies first. The Communitycan hardly be said to have progressed far enough inthe right direction. I know that a number of specificmeasures were taken to ease the uncertain supplysituation created by political developments and mili-tary clashes in the Gulf region. But the worseningeconomic crisis must spur us on to further action.

This comprehensive approach will be one of the priori-ties of the new Commission. We cannot expect to getvery far with structural adjustment without a coherentenergy policy. We will make a special effort in thefield of energy saving, nuclear safety and the develop-ment of new technologies. We will do more in the areaof prices and stocks. Outside forces at play here meanthat the dialogue with oil-producing countries must bestepped up and joint action taken to help the devel-oping countries. For the dialogue is doomed to failureunless the problems of both parties are considered.

Another source of disquiet is that the Community, asthe world's leading exporter, sees a threat to the free-trade system, built on rules and procedures approvedby GATT, and vital to its existence. Our trading posi-tion should enable us to require more considerationand respect from our major trading partners than wehave in the past. We should ask them to avoid a returnto protectionism in exchange for our commitment tofree trade. It is because we are aware of the vital

importance of our trading links with other industrial-ized countries that we have decided to use forth-coming international meetings to convince PresidentReagan and our Japanese partners of the seriousnessof the situation. I would add that the opening of ourfrontiers must not be allowed to lead to any imbalancein our trade or to any disturbance of our economicand social equilibrium. Something will have to be donefairly soon about our lop-sided trade balance withJapan.

There is a further point I would like to make. A Euro-pean monetary order is vital if the Community is tomaintain its leading position in world trade. There isno need for me to go into the relationship betweentrade and monetary decisions here. Suffice it to saythat an instable international monetary situation canseverely handicap the development of world trade.

A number of questions have been raised over the lastfew years in connection with the third problem area —our relationship with the Mediterranean countries,which are of prime strategic importance to Europe.The main concern is enlargement, the acid test of theCommunity's ability to evolve and expand and ulti-mately enter the big league. All the Member Stateshave declared their readiness to accept this challenge.We must on no account disappoint those who — bothwithin the Community and outside it — are countingon our Institutions.

Naturally, the effects of enlargement will reverberatenot only throughout the Member States but alsothroughout the various Mediterranean countrieswhich have enjoyed preferential trade arrangementswith us for so long. The inevitable conclusion is thatthe Community must define a coherent and compre-hensive policy towards these countries. The fact thatone member of my team of my team has taken overspecial responsibility for this policy speaks for itself.

Although enlargement is eminently desirable from thepolitical point of view it is nevertheless understandablethat, in this period of crisis, we should ask what prob-lems expansion is likely to bring for the variousCommunity policies and to what extent there is adanger of enlargement weakening rather than streng-thening the union. The new Commission will act tofoil those who view the third enlargement as a chanceto demolish the patient building of the past.

However, I am sure that no one will contradict mewhen I say that the deep-rooted unease which ishaunting our peoples, and which I see reflected in thisHouse, goes far beyond these three imperatives.

Let us not mince words. We cannot hope to give anygenuine reassurance to the people of Europe unless weare prepared to grasp the nettle and tackle the problemof security. The security of oil supplies, for instance, isas much a political issue as an economic or technolog-

ical one. The Euro-Arab dialogue — which we owe itto ourselves to revive — is one proof ot this.

Indeed who would attempt to draw a line between thepolitical and the economic these days?

I need hardly say that the revamping exercise I havejust outlined will be doomed to failure unless it isbacked by what my friend Emilio Colombo has termeda politico-institutional design. And this politico-insti-tutional design will remain an illusion until the institu-tions stop bickering and start talking to each other atlast.

You know better than anyone else that the Commu-nity cannot afford an institutional crisis.

The rot set in 1975. Since then we have witnessed asteady erosion of the European idea that inspired theauthors of the Treaties, its covert watering-down intointergovernmental cooperation. Above all we havewitnessed the re-emergence of nationalist reflexes. Bynow every issue that comes up is used as a pretext forpicking an inter-institutional quarrel, for sparking offa crisis of confidence between the Member States.Perhaps this is our way of avoiding the real issues andducking the real problems. We are being treated to thesad spectacle of Europe indulging in bitter infightingwith national vanities being given full rein. Instead ofanticipating or taking up the challenges of our decade,Europe is content to react, usually when it is too late.It is hardly surprising that our generation's idea ofEurope as a grand design is losing ground.

During the Hallstein years no one had any doubtsabout the Commission being an independent policypowerhouse. In those days the Council had no optionbut to act on the Commission's initiatives as it trans-lated commitments spelled out in the Treaties and dulyratified by the Member States into regulations anddirectives. But as soon as it became necessary to gofurther and break new ground, the Council's influencein the formulation of decisions became more and moredominant. It must be said that today, in practice, theCouncil operates more like an intergovernmentalconference than the institution described in the Trea-ties and given a specific mission which is well knownto you all.

It is true that the well-meaning have tried to right thebalance. The Commission and the 'non-elected'Parliament have pointed repeatedly to the need forinstitutional reform. On each occasion — in 1962, in1973 and again in 1975 — the ingredients of theproposed reform included wider powers for theCommission as the Community's executive, strongerlegislative powers for Parliament and a greatlyreduced role for the Council and its committees.There is no need to tell you that no Council everexmanined these problems in depth. The only signifi-cant institutional reform over the years has been your

election by direct universal suffrage. And the Treatiesmade provision for that. In the present crisis our reflexshould be to close ranks, to defend the Community'scohesion and international identity. Instead, let's faceit, there is a crisis of confidence between the institu-tions. Why can't we all be courageous enough to takeour share of the blame? The Council, for instance, isjeopardizing the effectiveness and development of ourmission by trying to freeze budgetary funds, byrefusing to apply its own rules and finally by failing toagree on new rules even where these are proposed atits request. On this point I feel that even a partialreturn to the qualified-majority vote written into theTreaties would be desirable, or even necessary . . .

(Applause)

. . . particularly in the enlargement context. Indeed theEuropean Council itself advocated this.

By wanting to make the Commission more indepen-dent of the Council, some Members of this House arein danger of going too far in the opposite direction.The Community is, after all, based on three institu-tions — the Council, the Commission and Parliament.The new Commission will defend its independenceagainst all comers in 'the interests of the entireCommunity — in yours too — and in line with theTreaties. It will strive to be ever more vigilant andvigorous in discharging its responsibilities. It is deter-mined to be the real motive force of the Community,jealously guarding its right of initiative.

(Applause)

It will keep in close touch with Parliament briefing itand consulting it scrupulously. The new Commissionwill endeavour to provide the information which isnecessary and essential in a democratic Europe so thateveryone can see and judge the whys and whereforesof the Commission's proposals, Parliament's views,and the Council's decisions. It was no idle promise Imade to this House last month when I said that thenew Commission intends to work to restore the insti-tutional peace which we all want so badly.

We should weigh up the consequences of the chronicineffectiveness of the Community Institutions in thedecision-making process. Taking the political viewthere is a danger that our penchant for referring ourinter-institutional disputes to the Court will in timediminish the Community and its institutions — theCourt included. In passing may I pay sincere tribute tothis eminent institution which has always managed tostay on course despite the storms. The Communityneeds it now more than ever to tell us what is right.

(Applause)

However, \ve need to have done with squabbles aboutinterpretation, with legal wrangling. We need to iden-tify our goal, to decide what form of European inte-

gration we want, and ask ourselves whether we areprepared to make the sacrifices that a politicalcommitment of this kind entails.

Ladies and Gentlemen, you know what Europe'sproblems are, just as the Commission knows whatEurope's problems are. You, like us, must feel that thetime has come to pull ourselves together. Without thesupport of Parliament, without the support of theCouncil, the two institutions participating with it inthe .decision-making process, the new Commissioncannot succeed.

For the reason the institutions can and must join in agenuine three-way conversation. Firstly, through therestoration of peace in our institutions and candour intheir relations with one another. Secondly, by givingthe Commission a pivotal and catalytic role in definingthe Community's response to the major issues of theday. And thirdly, by evolving and entirely new formulafor integration, putting Europe in a stronger positionto meet the many challenges confronting it. It seems tome that the restoration of peace in our institutions andcandour in their relations with one another is abso-lutely vital if we are to succeed.

Let me explain. The Commission has no ambition totake over the functions of the Council or Parliament.What we want is to see the1 Council act — and I meanact — using the legislative powers conferred on it bythe Treaties. We want it to act promptly, responsiblyand above all consistently. But we also want it to acton the basis of Commission proposals drafted by offi-cials who — and this is absolutely essential in my view— must remain independent in the performance oftheir duties. And I may say here and now that myCommission will abandon the practice, . all toofrequent in the past, of sending the Councilcompromise proposals which have been watered downto satisfy the demands of national experts to the pointwhere there is nothing left of the Commission's initialideas.

(Applause)

The new Commission's aim — and I give you myword on this — will be to produce proposals whichreflect the interests of the Community, the wholeCommunity, and nothing but the Community, andwhich we will be happy to put our name to. I mustmake the point again that the new Commission willnot sit and wait for the Member States to authorize orrequest it to prepare a proposal on this, that, or theother.

(Applause)

As far as this House is concerned, may I sav that I andmy colleagues — and eleven of us have served as MPsand Government Ministers, remember — areexpecting a great deal of you.

Firstly, we expect Parliament to muster a majoritywhich is prepared to support the Commission — atleast on the key issues — in the exercise of its role asinitiator of proposals in the Community interest.Secondly, we expect Parliament to fulfil its consulta-tive role by supplying us with high-quality reportswhich will unquestionably increase our knowledge andwhich will always be given due consideration. For ourpart, we promise to assist you in these tasks by briefingyou as fully as possible. Mr Andriessen will have acrucial part to play here, and his reputation and pastrecord are a sufficient earnest of our future intentions.

The new Commission is determined to live up to itsobligations and make every endeavour to fulfil itsmission. This goal is attainable now that its machineryhas a direct line to the wishes of the people of Europeas expressed through this House. Not that this willchange the face of Europe. The Commission cannotmove mountains or transform the harsh realities of therecession. Our function and our duty is rather to inciteothers to action, exercising our right of initiative cour-ageously and not hesitating to break new groundwhere necessary. This means that my colleagues andmyself, and this is something to which I am personallycommitted, must form a truly united and collectivelyresponsible body of men which, need I repeat, cannotbe equated to a coalition government. Our position inthis three-way conversation between the institutionsmust be determined by the twin principles of effective-ness and democracy. And equally by a duty to defendthe application of Community law. It was this lastconsideration that decided us, in the current budgetdispute, to initiate the infringement procedure prov-ided for in the Treaty. But we are by no means intran-sigent in this matter. In fact, we are endeavouring tonegotiate new rules with the Member States.

It must not be forgotten that these institutional ques-tions are much more important to us than to anynational government. As an institution which hasbarely come of age, we have a clear need to defend thefew powers which the Treaties have given us so thatwe may be in a position to fulf i l our function properly.

But — I repeat — the Commission must also play orresume a pivotal and catalytic role in defining theCommunity's response to the major issues of the day.

We have seen that the challenges facing the Commu-nity are constantly increasing both in number andscale and that the policies which must be devised totackle them will go far beyond those provided for inthe Paris and Rome Treaties in the years ahead.Granted, the Treaties were written in a very differenteconomic climate, and would, no doubt, benefit frombeing touched up here and there. But where would webe without them?

While we do not wish to press the point, I can tell youfrankly that the Commission is keen to speak forEurope in the great international debates of our time

on issues which may not be explicitly mentioned in theTreaties, but nevertheless have a direct bearing ontheir application or inapplicability.

It is important — of this I am convinced — that the .Community as such and not simply individual Euro-pean States, should participate in major internationaldebates.

(Applause)

What institution other than the Commission which theTreaty has placed under your control would be betterable to express a truly Community viewpoint on anyissue you care to name? It is time we realized thatEurope's credibility suffers each time its partnersperceive that its united front is a sham, that nationalpolicies and Community policies are, even on funda-mental matters deriving from the Treaties, not onlydivergent but at times diametrically opposed. Thedanger is that by acting in this way we will lose on theswings as well as the roundabouts. Typical cases haveproliferated alarmingly in recent years. The cumulativeeffect, in today's climate, could be a quick recipe fordisaster.

What Europe really needs is an entirely new formulafor integration. The future of Europe is patently notjust a question of economics.

The world's cards are being redealt and Europe mustsee to it that it gets the hand it deserves. To do this itmust first master, and if possible anticipate, the forcesof political, technological and economic change. Apolitical Community which would incorporate andtranscend the three existing Communities is no longeran impossible dream. But this political Community willnever see the light of day unless there is a commonpolitical will, and you, Ladies and Gentlemen, are in agood position to — shall I say — spread the goodword, or at any rate the missionaries among you. For Ihave no illusions: unless the Member States act, unlessthe people of Europe are won over to the cause, unlessthere is a campaign to educate and inform our citizens,this initiative could die an early death. Instead ofrelying on a set of external mechanisms, such ascommon policies and institutions, to change people'sattitudes, we should start from the attitudes them-selves, from the inside, if we want to arrive some dayat outward expressions of solidity. Instead of makingour ultimate goal the creation of Europe, it is time wethought about creating Europeans.

Ladies and gentlemen, in conclusion, your election bydirect universal suffrage gave democracy a foothold inthe European venture. But this does not mean thatyour constituents are convinced of the relevance ofour work to them. Let us therefore remain alert andattentive to the wishes of the people of Europe,notably by devising a new framework for dialoguebetween our two institutions.

It is not for me to go into details at this stage. All Iwould say is that, in the Commission's view, no aspectshould be overlooked. With Europe — and indeed theworld — at the crossroads of history, in the process ofexchanging one civilization for another, our task, hereand now, is to plan a second-generation Europe.

Anyone reading the programme and priorities whichwe have put before you with a practised eye willrealize that through all these discussions on thecommon agricultural policy, on the need for a newbalance between it and other policies, old and new, ohmonetary policy, energy policy, social and regionalpolicy, it will be our privilege, over the months tocome, to re-model the Community, to give EuropeanUnion its definitive shape, in short to create Europe.And this mission we must fulfi l — and I include thisHouse in this — in the greatest possible clarity,without the slightest trace of ambiguity, and in aconcern to avoid any misunderstanding.

We will also have to be crystal-clear in emphasizingour commitment to enlarge the Community and at thesame time to strengthen and complete it. This triptychof The Hague, recorded in history in 1969, remainsfully valid and now, twelve years on, we must be quickto put it into practice.

If we are to attain this goal, we must at the same time— that is to say right away — put a searchlight on therole of the institutions and their relations with oneanother, otherwise with ambiguity escalating intomisunderstanding, and crisis into lawsuit, we willquickly run out of steam as the months wear on andlose what little confidence we still have in ourselves.

This need to put our house in order has often beenneglected and discovered anew. At such times peoplehave turned to a great European like Leo Tindemans,or to the Wise Men, or to more and more experts andtheir reports, which sad to say have served only to fillthe library shelves.

Which is why my question today is this: surely you,the elected representatives of the people of Europe,and we, the Commission, selected by our Govern-ments to be the guardians of the Treaties, theCommunity's executive, its powerhouse, surely we —together — are capable of producing all the proposalswe need on what can and must be done to plan Euro-pean Union. And are we not equally capable ofdeciding on, and then submitting, whatever proposalsare necessary on what might or ought to be done?

(Applause)

The European Council, and the Council of Ministerswith its various hats, are, I believe, regular visitors inthis House; they too are invited to take part in thegreat mission which awaits us. But even if it is quiteunderstandable that our Governments might at thisstage prefer to stand on their dignity, in the know-

ledge of their power, and insist on acting only onproposals, Commission and Parliament should notdelay in declaring themselves ready to commence thetask with the intention of completing it before thisParliament comes up for re-election?

Ladies and gentlemen, we must constantly bear inmind that by 1985 we must have consolidated theCommunity, and this we can only do by adapting it,by underpinning what already exists and by developingour institutions. By 1985 either our Community willhave progressed as I have indicated, it will have gonefurther and gained strength, or it will not even be whatit is today, it will be falling apart at the seams.

Madam President, ladies and gentlemen, my appeal toyou on behalf of the new Commission is that weshould work together to breathe new life and vigourinto our Community. I would ask you therefore tocontinue to keep watch over the affairs of Europe,bearing two things in mind. Firstly, it is far fromcertain that time is on Europe's side. Thanks to theheadlong advances of technology, our planet isconstantly shrinking. The major problems of our timeare gradually becoming universal in nature, and every-thing points to the fact that our geographical situationand historical heritage will in future be a less powerfulimpetus to solidarity and cooperation than they havebeen in the past. Secondly, in the tasks which liebefore us we will need as much courage as imagina-tion. Alfred, Grosser recently dubbed me 'the manwho wouldn't give up'. I hope, ladies and gentlemen,that where Europe is concerned, I may prove himright.

(Sustained applause)