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With the accession of Austria, Finland and Sweden in 1995, the Union now has 15 Member States and nearly 370 million citizens. The new Commission chaired by Mr Jacques Santer began its five-year term of office; this was the first Commission history of the Communities to have been subjected to formal confirmation by the European Parliament.
The institutions' main concerns throughout the year were to prepare for the third stage of economic and monetary union and the changeover to the single currency, develop a job-creating economy and give priority to the fight against unemployment by means of social solidarity measures to accompany economic policy measures, prepare for the 1996 Intergovernmental Conference, take up the challenge of enlargement and reinforce the Union's role on the world scene, and, at the same time, remember the citizen's central place in the process of European integration.
The Madrid European Council on 15 and 16 December unequivocally confirmed that the third stage of economic and monetary union, which will then be an irreversible process, will begin on 1 January 1999 in full compliance with the convergence criteria, timing, protocols and procedures established by the EC Treaty. It also adopted the scenario for the introduction of the single currency, to be called the Euro, following a debate launched by the Commission's Green Paper of 31 May. The Commission was also at pains to boost public awareness of the fact that a strong and stable single currency will make a valuable contribution to long-term sustainable job creation.
Job creation and its companion, the fight against unemployment, were the main social, economic and political objective pursued by the Union and its Member States throughout the year. The Madrid European Council welcomed the cooperation between all concerned in implementing the medium-term employment strategy and monitoring procedure established and confirmed by earlier European Councils. It noted that the Member States had put into operation multiannual employment action programmes incorporating the five priority lines of action agreed at Essen and that the innovatory measures involved were already bearing fruit. Approving the joint report presented by the Commission and the Council, the European Council noted that for the first time there was a consensual analysis of the means of ensuring that the current economic recovery was accompanied by an improvement in the employment situation. The Commission had presented an initial annual report on employment trends in the Union and defined a European strategy to encourage local employment initiatives, which had been taken as the basis for the joint report. It also presented the European Council with a report on the role of small businesses as a source of job-creation, growth and competitiveness, stressing the need to improve their access to information, training and research, to the internal market and to capital markets, to remove tax discrimination and to boost the Community lending instrument for them set up by the Edinburgh European Council. The Madrid European Council approved most of these points in its conclusions. Education and vocational training are a vital tool for combating unemployment and boosting competitiveness, and there were major developments, notably with the adoption of the Socrates and "Youth for Europe" programmes, the implementation of the Leonardo da Vinci programme (which has been the source of significant progress in vocational training) and the presentation of the Commission's White Paper on education and training. Major progress was also made with the information society.
The Commission continued work on the trans-European networks, the development of which is a key component of the European Union's strategy for growth, competitiveness and employment. On 18 September the Council adopted the financial regulation governing the granting of Community financial aid for trans-European networks. On the basis of the Commission's progress report, the Madrid European Council called on Member States to give top priority to actually implementing projects identified by the Essen European Council as being of special importance and called on the Council to provide additional financial resources.
In its concern to ensure that economic policy was underpinned by a bold, balanced social policy as a core feature of European integration, the Commission adopted a new medium-term social action programme (1995-97), a fourth programme of action to develop health and safety at the workplace (1996-2000) and a communication to stimulate debate on the future of social protection in Europe. The social dialogue was reinforced, and the social partners came to their first agreement, dealing with reconciliation of working life and family life, under the social protocol. The Commission opened new consultation under the protocol, on the burden of proof in sex discrimination cases, flexibility in working time and stability of employment, and information and consultation of workers.
The Madrid European Council stressed that enlargement to Central and Eastern Europe and the Mediterranean without jeopardizing the acquis communautaire was both a political necessity and a historic opportunity for Europe, and it adopted a timetable and a preparation strategy. It confirmed that accession negotiations with Cyprus and Malta, with whom a structured dialogue had already commenced this year, would begin on the basis of Commission proposals six months after the conclusion of the Intergovernmental Conference. Regarding the countries of Central and Eastern Europe, it stated that after the conclusion of the Intergovernmental Conference, it would consider the results of the Conference and the opinions and reports to be produced by the Commission and then take the decisions needed to launch accession negotiations; the hope is that their opening will coincide with the start of negotiations with Cyprus and Malta. The Commission took initiatives to implement the pre-accession strategy for the associated countries in Central and Eastern Europe and the Baltic States defined by the Essen European Council; they included publication of a White Paper on their preparation for integration into the internal market and reports on the links between accession and the common policies, particularly the common agricultural policy. The structured dialogue provided for as part of the strategy became fully operational in 1995, and several countries deposited their formal applications for membership; the Cannes European Council established a stable medium-term framework for financing external policy in relation to Central and Eastern Europe for the period from 1995 to 2000, and the Madrid European Council confirmed the key role of the PHARE programme in this respect.
There were significant developments in all fields of the European Union's external relations. The Union manifested its determination to tighten its links with its Mediterranean partners. The Commission fleshed out the broad lines of partnership and proposed a financial instrument (MEDA) comparable to PHARE and TACIS, and the Cannes European Council produced a financial framework for relations with these countries in June; the Euro-Mediterranean Conference in Barcelona adopted a declaration and a work programme, welcomed by the Madrid European Council as the starting point for a comprehensive association which will encourage peace, stability ad prosperity in the region and the establishment, in the long term, of a free-trade area. Apart from the new agreements with Tunisia, Israel an Morocco, Parliament gave its assent to the completion of the customs union with Turkey.
The Union maintained its resolute support for the peace process in the Middle East and former Yugoslavia, being the world's leading donor to these regions. At the end of the year the agreement putting an end to the conflict in former Yugoslavia was concluded at Dayton, Ohio, and signed in Paris. The Commission built up a regional reconstruction strategy and proposed practical measures to improve the management and coordination of international aid, and the European Council confirmed the Union's determination to make a substantial contribution to the implementation of the peace agreement in a climate of international burden-sharing.
Under the common foreign and security policy, the Stability Pact for Europe was adopted in April; this was the concrete outcome of the European Union's first joint action and an unprecedented example of preventive diplomacy in Central Europe.
Progress was made in consolidating relations between the European Union and the independent States of the former Soviet Union, thanks to negotiation of a new generation of partnership and cooperation agreements, to intensification of the political dialogue, to more detailed definition of the Union's relations with some of these States and to intensification of technical assistance under the TACIS programme. The Madrid European Council reiterated support for Russia's efforts to secure stability, development, peace and democracy, and reaffirmed the Union's readiness to pursue the programme of technical assistance to the independent States of the former Soviet Union so as to support their economic and political reform processes.
The deepening of relations between the European Union and the United States continued with the adoption of a new transatlantic agenda and an associated joint action plan at the summit held on 3 December.
The Commission began implementing the new approach established in 1994 to take account of the growing weight of Asia in world affairs. A medium-term strategy for relations with Japan was proposed, based on stronger cooperation and dialogue, and a long-term policy on relations with China was devised. Cooperation agreements were signed with Nepal, Sri Lanka and Vietnam, and negotiations commenced with the Republic of Korea.
The Commission further proposed strengthening the partnership with Latin America for the period from 1996-2000 on the basis of closer political links, stronger economic integration and free trade and the focusing of cooperation on priority themes; the approach was favourably received by the Madrid European Council. Relations with the region were marked by the signing of an interregional framework agreement for economic and trade cooperation with the Mercosur on the occasion of the Madrid European Council, the aim being to tighten links between the two regions and prepare for eventual association. The Commission proposed that the San José dialogue between the European Union and Central America be renewed and presented a strategy for closer relations with Mexico, with which a solemn joint declaration was signed. A joint declaration on political dialogue was signed with Chile, and the Commission proposed that dialogue and regular consultations be started with Cuba.
The main event in relation to the ACP countries was the signing of the revised Lomé Convention in Mauritius in November. This will reinforce the association between the European Union and the ACP countries, with a substantially increased financial allocation. Regarding development policy more generally, the Commission continued to assert its international role, notably by attending UN conferences such as the Copenhagen World Social Development Summit and the fourth World conference on Women in Beijing. It also stepped up its policy of seeking universal respect for human rights, consolidation of democracy and the rule of law, notably by inserting a suspension clause in international agreements to apply in the event of violations of human rights. The Union also played a decisive role in the international defence of the environment, notably in controls of transfrontier shipments and disposal of hazardous waste (Basle Convention), biological diversity, substances that deplete the ozone layer (Montreal Protocol) and the adoption of a pan-European environmental strategy (Sofia Conference).
Within the Union, the integration of environmental concerns into other policies was one of the Commission's priorities. Improving the quality of life through initiatives relating to public health, encouraging solidarity with the elderly and the disabled, promoting equal opportunities, combating racism and xenophobia, boosting consumer protection, developing cultural action at European level - these were all at the centre of attention in Community business. Throughout the year the institutions sought to bring the Union closer to its citizens. Regarding justice and home affairs cooperation, there was further consolidation of the new framework for cooperation established by the Union Treaty, and some significant results were achieved. In March, for instance, the first convention under Title VI of the Treaty, concerning a simplified extradition procedure, was signed; it was followed in July by three more conventions, one of which was on Europol, a major element of police cooperation between Member States. In November agreement was reached on the first joint position, concerning the interpretation of the concept of refugee. The Council adopted a joint action to determine the Community financing procedures for justice and home affairs. But these steps forward did not suffice to allay concern at the operation of Title VI and the scale of the results. To flesh out the concept of Community citizenship and secure real freedom of movement within the Union, the Commission presented three proposals for Directives on the removal of border checks, travel rights for third-country nationals within the Union and the adjustment of secondary legislation relating to entry and residence. The Council enacted measures relating to visas for third-country nationals crossing the Union's external borders, and the Madrid European Council welcomed the adoption of two decisions on consular protection that will enable Union citizens to seek assistance from the consulates of all Member States in non-member countries. On 12 July Parliament appointed the Union's first Ombudsman with power to hear complaints from Union citizens or residents about maladministration by the Community institutions.
The institutions adopted a number of measures by way of follow-up to the 1993 interinstitutional declaration on democracy, transparency and subsidiarity. The Commission improved public access to its documents, intensified consultations with interested circles prior to making proposals and pursued its dialogue with interest groups. It presented the Madrid European Council with a report on the application of the principles of subsidiarity and proportionality, simplification and consolidation, entitled "Better law-making". It studied the report by the group of independent experts on simplification of legislation and administration, and emphasized the importance of a comparable effort by Member States to simplify their own legislation and lighten the burden on business. It also took great trouble to answer questions from the general public, clarify what was at stake and what was to be gained from European integration in terms of everyday life and explain Community policies so as to remedy the lack of understanding and general unintelligibility.
In this spirit, the Commission, as announced by its President, Jacques Santer, when he presented the new work programme - "Doing less but doing it better" - endeavoured to reduce the number of proposals for new legislation, scrutinizing them very carefully for compliance with the principles of subsidiarity and proportionality and engaging in extensive prior consultation so as to stimulate reflection and thus prompt framework action plans. It amplified this reorientation of its working methods by initiatives relating to administrative and financial management and the fight against fraud, its constant concern being sound and efficient management.
The Commission hopes consequently to be well placed to meet the challenges facing the Union in 1996, which will have to be tackled comprehensively - securing employment and solidarity, attaining economic and monetary union on the basis of the timetable set at Madrid, exploiting the possibilities offered by the internal market, preparing for enlargement in accordance with the process determined by the European Council, and making a success of the Intergovernmental Conference to review the Treaties.
Active preparations were made during the year for the 1996 Intergovernmental Conference. The Community institutions and other bodies presented their reports on the operation of the Treaty on European Union as input for the Reflection Group chaired by Mr Carlos Westendorp, which began work in June and reported to the Madrid European Council in December. The report aroused keen interest at the European Council, where it was felt that the Group's conclusions laid a valuable foundation for the Conference. It was decided that the Conference will open on 29 March 1996. The revision of the Treaty should strengthen the peace and prosperity that the process of European integration has consolidated since its inception nearly 50 years ago. The aim must be to conclude a new pact for Europe, on the basis of the acquis communautaire, and prepare the Union for subsequent enlargements; this will mean giving thought to the functioning of the institutions, their composition, their working methods and their decision-making mechanisms, the overall concern being to maintain a single institutional framework and to respect the general institutional balance. The Intergovernmental Conference will also have to put the citizen back at the heart of the Union by enhancing democracy, openness and the effectiveness of the institutions and policies.