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Brussels, 22 May 2002.

Commission proposes a far-reaching overhaul of the European Union

In its first paper to the Convention on the Future of Europe, the Commission calls for more effective EU structures that can respond better to citizens' demands and expectations. The role of the Union should be substantially strengthened in three major areas. The introduction of the Euro requires better mechanisms to steer the European economy. There has to be a genuine European capacity to enhance security and freedom of citizens. The Union must have a forceful foreign and security policy in order to make a difference in the world. In order to achieve this, the Commission wants stronger economic policy coordination. It proposes common border controls with a common immigration and asylum policy. It wants to integrate gradually the function of the High Representative for Common Foreign and Security Policy in the Commission. Decision-making should be simplified within a single institutional framework, putting the European Union firmly on the road towards a Constitution.

The Communication was adopted today on the initiative of President Romano Prodi and Commissioners Michel Barnier and António Vitorino.

President Prodi said: "What we are proposing is not a State with a European government. We are proposing a Union of peoples and States, that is able to protect citizens better and enhance their interests in areas where no country alone is powerful enough. This is our solution for governing democratically in a globalised world".

Following the successful launch of Euro notes and coins, the Union needs to strengthen the coordination of budgetary and economic policies of the Member States. Free-riding budgetary behaviour by any Euro member must be avoided. Effective coordination depends on the use of the Community method. The Commission should have the right to introduce proposals to the Council on the Broad Economic Policy Guidelines or on actions against national decisions that threaten macro-economic stability. Currently, the Commission can only recommend. The Council should only be able to depart from Commission proposals by unanimity.

For matters directly linked to the functioning of the Euro-area, a Council composed of Euro members only should be established in the Treaty, giving it formal decision-making powers. In the international arena, the Euro-area would gain by speaking with a single voice through the Commission.

For improving security and rights of the people the Commission says the Union should assume a more significant role in areas such as external border control, fight against organised crime and terrorism and co-operation in penal and civil law. A system based on common norms and financial solidarity should improve external border control, leading over time to a common European Border Guard.

While voluntary co-operation can achieve progress, the need for binding legislation on certain aspects should also be examined, such as the statute of immigrants within the European Union or a European regime for dealing with asylum seekers. All legislation on justice and home affairs should be proposed by the Commission, adopted by co-decision (Council and Parliament) and controlled by the Court of Justice.

In this context, Commissioner Vitorino recalled: "The constitutional architecture of the Union should be based upon the Charter of Fundamental Rights. This will guarantee the protection of democratic values and the individual rights of all residents in the Union".

Structural changes are needed if the Union is ever to become a credible and effective player at the global level. Currently, the role of the Union in the world matches its economic importance only in trade and development policy. In foreign policy, it remains weak and confused with too many voices claiming the right to initiate policy initiatives or represent Europe. The means for action should be better integrated in order to improve the credibility and authority of the foreign and security policy of the Union.

In order to ensure efficiency and coherence between different external policy instruments, the Commission proposes to give the right of political initiative to the High Representative and to integrate her in the Commission.

Clarifying the way in which the European Union may use its powers

The Union must act within the limits defined by the Treaty and respect national identities. A catalogue of powers is legal fiction and not a viable option to achieve this. In contrast, the means for limiting the way in which the European Union uses its powers should be improved.

The Commission is in favour of a new mechanism that would ensure compliance with the principles of subsidiarity and proportionality before Council and European Parliament adopt an act. Moreover, implementation of European policies should be as decentralised as possible, for instance in the case of the new regional policy for the period after 2006.

The Convention should deliver a constitutional text, which should be as simple and understandable as possible, unlike the current set of four Treaties with more than 700 articles. Commissioner Barnier said: "The complex 'three pillar' structure as introduced by the Maastricht Treaty should be abolished. The Union needs a single institutional architecture that makes it more democratic and easier for people to comprehend".

A reduced number of decision-making rules would also simplify the current system. Qualified majority voting in the Council should be the general rule, including for fiscal and social affairs related to the single market. The co-decision procedure should apply to all legislative work. The constitutional text should give the Parliament increased budgetary powers.

An historic challenge and an opportunity

President Prodi concluded: "The enlarged Union will need a strong Commission to initiate policy proposals, a Council that is able to decide, and a European Parliament with increased powers in the legislative and budgetary process.

We inherited a highly original institutional architecture from the founding fathers of the Union. We now have the political responsibility to give effective structures to the European leaders of the future".

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