AGENDA:

1. Welcome address and procedural matters

Mr László KÖVÉR, Speaker of the HungarianOrszággyűlés,Mr Richárd HÖRCSIK, Chairman of the Committee on European Affairs of the HungarianOrszággyűlés.

2. State of play of the Hungarian Presidency of the Council of the European Union

Presentation by Mr Viktor ORBÁN, Prime Minister of Hungary.

3. The way to recovery: Economic governance, Europe 2020 Strategy and European

Semester

Introduction by Mr Richárd HÖRCSIK, Chairman of the Committee on European Affairs of theHungarianOrszággyűlés,Presentation by Mr Maroš ŠEFČOVIČ, Vice-President of the European Commission responsiblefor inter-institutional relations and administration.

4. Technical modifications of the Rules of Procedure of COSAC

5. Report on the Proceedings of the Conference of Speakers of EU Parliaments

Introduction by Mr Richárd HÖRCSIK, Chairman of the Committee on European Affairs of theHungarianOrszággyűlés.

6. General policy debate on the State of the Union

Keynote speaker: Mr György SCHÖPFLIN, Member of the European Parliament, Jean Monnetprofessor.

7. Debate and adoption of the Contribution and Conclusions of the XLV COSAC.

1. Welcome address and procedural matters

Mr László KÖVÉR, Speaker of the HungarianOrszággyűlésMr Richárd HÖRCSIK, Chairman of the Committee on European Affairs of the HungarianOrszággyűlés.Mr Richárd HÖRCSIK warmly welcomed the participants of the XLV COSAC, particularly theChairmen of the Committees on European Affairs of the EstonianRiigikoguand the RomanianSenatulwho participated in COSAC for the first time, as well as the Chairperson of the EuropeanConsultative Committee of the NorwegianStorting,who participated as a special guest.Mr HÖRCSIK invited COSAC to observe a minute of silence in remembrance of Mr FerencMÁDL, former President of the Republic of Hungary, who passed away a day before.Mr László KÖVÉR, Speaker of the HungarianOrszággyűlés,addressed the XLV COSACmeeting, by presenting the most important aspects of the parliamentary dimension of theHungarian Presidency. He underlined the success and good feedback from the previousinterparliamentary meetings. The Speaker recalled that he had participated at the Conference of1

Speakers of the Parliaments of the European Union (hereinafter referred to as "the Speakers'Conference") on 4-5 April 2011 in Brussels. He underlined that it was always possible to reach aconsensus, as it had been the case of introducing a new language regime of the Speakers'Conference under the Hungarian Presidency in 2005. The Speaker also pointed out the importanceof cultural diversity as one of the key objectives of the Hungarian EU Presidency.Mr HÖRCSIK started his introduction with the priorities of the Hungarian Presidency, underlyingthe most important challenges still ahead. He went on to present the draft programme of the XLVCOSAC meeting, drawing attention to the changes discussed at the meeting of the PresidentialTroika of COSAC (hereinafter referred to as "the Troika"), namely the inclusion of the issue of theproposal for a Council directive on a Common Consolidated Corporate Tax Base (hereinafterreferred to as "CCCTB") in the agenda and the change in the presentation of the results of theSpeakers' Conference in Brussels. The programme of the XLV COSAC meeting, as amended, wasadopted by the participants.Afterwards, the Chairman presented the 15thBi-Annual Report of COSAC. He introduced thetopics of the report on economic governance, the European Semester and the Commission WorkProgramme 2012.Mr HÖRCSIK informed the participants of the decisions of the Troika meeting which took placethe day before. He underlined that the Troika supported the consolidated proposal of thePresidency on amending the Rules of Procedure of COSAC. He mentioned the discussions on theletters received by the Presidency and thanked the 35 Parliaments/Chambers for their commitmentto continue co-financing the COSAC Secretariat in 2012-2013.

2. State of play of the Hungarian Presidency of the Council of the European Union

Presentation by Mr Viktor ORBÁN, Prime Minister of HungaryMr Viktor ORBÁN, Prime Minister of Hungary, welcomed the delegations and recalled that forfour years he had been the Chairman of the Committee on European Integration of the HungarianOrszággyűlés.Mr ORBÁN mentioned that the European Union when he left as Prime Minister in2002 was an optimistic Union. Europe’s reunification and the introduction of the euro gavegrounds for optimism, and the competitiveness objectives of the Lisbon Strategy also seemedrealistic. He underlined that the Council of the EU in 2010 lacked such optimism. EU MemberStates are plagued by unprecedentedly high debt levels, the employment rate is extremely low,only 65 %, as compared to 75 % in the United States and 85 % in China and Europe is strugglingwith serious demographic problems.Mr ORBÁN underlined that Europe has no time to lose and this was why the HungarianPresidency incorporated in its programme such challenging issues as the reform of economicgovernance, the creation of a European energy market, the setting up of a new European financialregulatory system, the maintenance of the enlargement process, the formulation of a uniform Romastrategy and a thorough discussion on demographic issues. On top of that, the Presidency had todeal with unforeseen events, such as the management of the impact of the Japanese earthquake andthe popular movements in Northern Africa. The Prime Minister added that family anddemographic issues raised heated debates. That is why an informal ministerial summit had beenorganised in Hungary in order to create a handbook of best practices on policies in family mattersthat could be useful for governments. Mr ORBÁN thought that the EU was struggling with thedilemma of how to respond properly to the challenges it faced. According to him, these challenges

also applied to the rescue of the euro, to the protection of the free movement of people as afundamental freedom of the Union, and to the struggle for maintaining the momentum inenlargement.Mr ORBÁN presented in detail the financial challenges faced by Hungary, elaborating on theeconomic and financial reforms and including those aimed at reducing the foreign debt from 82 %to 70-75 % in four years. He emphasized that after the elections Hungary decided not to opt forfurther IMF funding and expressed his opinion that it was not sustainable for a country tofinancially rely on international organisations instead of the markets.The Prime Minister stated that the Member States must accept that Europe would never be theEurope it was before the crisis. He believed that after the "warfare society" during the Cold Warand the pre-crisis "welfare society", the Union must build, "a workfare society", i.e. a society andeconomy that are based on employment. The increase of the EU’s average employment rate to atleast 75 %, the establishment of national self-respect and cultural identity, as well as the fosteringof good neighbourly relations were keys to success in the medium term. Mr ORBÁN emphasisedthat cooperation schemes are also competing in the world, which imposed on Hungary a task toaccomplish the best neighbourly relations in Central Europe, i.e. specifically between Slovakia,Serbia, Romania and Croatia, in the next 15 to 20 years.Mr ORBÁN was convinced that establishing a strategic relationship between Brussels andMoscow in the foreseeable future and promoting Russia’s participation in those internationalorganisations that set the rules for all of us are among the most important tasks of the Union. MrORBÁN also focused on the interests of Central Europe. In this regard, he pointed out that in thefuture relations between the EU and Russia, this region must certainly receive economicguarantees. He also highlighted the importance of building north-south energy corridors. Theregion should have a development institution of its own. He reminded that with the speed ofeconomic development before 2008, Central Europe was the engine of economic growth in Europeand there might be a chance that it would be again in the near future by keeping the industrialcapacities within the borders of the EU.The Members of Parliaments touched upon several issues in the following debate. A majority ofthem acknowledged the achievements of the Hungarian Presidency. In their comments, theypointed out - among others - the agreement on the Roma strategy, the progress on the package ofsix proposals on economic governance, Croatia’s accession and the integration of the WesternBalkans, the importance of energy and progress in the field of human rights, problems related toillegal immigration flows, avoiding harmful overregulation for SMEs, the accession of Romaniaand Bulgaria to the Schengen area and the promotion of the Eastern Partnership.Mr ORBÁN replied at length to the questions and comments of the participants highlighting that aPresidency without debates would be a failure (especially considering the controversial debates onthe new Hungarian media law at the start of the Hungarian Presidency). He expressed the hope thatin the next 2-3 weeks an agreement on the package of six legislative proposals on EU economicgovernance would be reached even though Members of the European Parliament had submittedmore than two thousand amendments to the proposals. The Prime Minister praised Portugal’sefforts to stabilise its economy by pointing out that Hungary knows exactly how difficult this is,because the first EU Member State in need of help was not Greece but Hungary. He stressed thatHungary was grateful to the IMF and the EU for their support, but a country should recover on itsown as soon as possible. In this context, Mr ORBÁN pointed out that Europe’s biggest problemwas excessive public debt. According to him, the other factor underlying the current uncertain

economic situation in Europe was the lack of strong states. Mr ORBÁN underlined that if the stateis weak, society becomes disintegrated. Thus the state has to prevent problems such as theexpansion of grey and black markets.Mr ORBÁN believed that the EU’s trustworthiness depended on the success of the enlargementprocess: "the European Commission has an enlargement strategy, which is slowly but surelymaking progress. There is only one point where the results were unexpected: the case ofMacedonia." Mr ORBÁN said he would appreciate Member States not to exercise their right toveto, allowing accession negotiations with FYROM to start. The Prime Minister also touched uponCroatia’s accession warning that delays in the accession could have serious consequences. ThePresidency’s objective was to conclude the accession negotiations in June and Hungary would doeverything possible to achieve this.According to Viktor ORBÁN, the accession of Romania and Bulgaria to the Schengen area couldnot be postponed any longer. He reminded that Hungary had always expressly supported theprocess. He also stressed that their performance would be on the agenda of the meeting of theMinisters of Justice and Home Affairs on 9 June 2011. The Prime Minister was confident thatBulgaria and Romania would meet the requirements and other political aspects should notinfluence this decision.Winding up his reply to the speakers, Mr ORBÁN also evaluated the Danube Strategy, saying thatso far, this was merely an intellectual and professional success. In his view the real question waswhether the strategy could be backed by financial resources.

3. The way to recovery: Economic governance, Europe 2020 Strategy and European

Semester.

Introduction by Mr Richárd HÖRCSIK, Chairman of the Committee on EuropeanAffairs of the HungarianOrszággyűlés.Presentation by Mr Maroš ŠEFČOVIČ, Vice-President ofthe European Commission responsible for inter-institutional relations and administration.In his introduction, Mr Richárd HÖRCSIK, Chairman of the Committee on European Affairs,recalled the package of six legislative proposals aimed at enhancing economic governance andhoped that the European Parliament would be able to vote the whole package by the end of June2011. This would be an important achievement not only for the Hungarian Presidency but for theentire EU.Mr Maroš ŠEFČOVIČ, Vice-President of the European Commission (hereinafter referred to as“the Commission”), emphasised the need to cope with the aftermath of the crisis, which broke outthree years ago. Although there were first glimpses of improvement, economic recovery was notequal all over Europe, and the global financial system was far from stable. Mr ŠEFČOVIČ notedthat the current, unprecedented crisis was often compared to the Great Depression, and added thatpast mistakes should not be repeated. One of them, unrestrained protectionism, only aggravated thesituation. He drew the attention to the fact that the severity of the crisis had eroded the trust ofcitizens in institutions, and that it had to be gained back.The Vice-President said that the situation could have been worse, because the climate was verydifficult, and media were full of Doomsdays' scenarios. Although Europe had not been able toprevent the crisis from happening, the EU had significantly mitigated the impact of the crisis andwas developing a toolbox of solutions preventing crises from happening in the future. Mr

ŠEFČOVIČ said that the European Union’s response to the crisis, aimed at strengtheningcoordination and boosting competitiveness, was based on three pillars:

Fundamental and comprehensive reforms of the financial system.

Mr ŠEFČOVIČunderlined that three new supervisory bodies1controlling the banks, the stock market andthe insurers had became operational on 1 January 2011. They were established to monitorpotential threats, prevent bubbles and thus provide protection for investors. One of them,the European Banking Authority, has been assessing the latest round of stress-tests, theresults of which will be made public. Governments and national regulators will be askedhow to cope with the results, which will help restore trust.

Increasing European competitiveness,

the conceptual framework and directions of whichare defined in the Europe 2020 Strategy. Mr ŠEFČOVIČ thanked national Parliaments fortheir contribution to the development of National Reform Programmes and Stability andConvergence Programmes that had been received and evaluated by the Commission. TheCommission will present country specific recommendations on 7 June 2011. After that therecommendations will be discussed in detail in EPSCO, the meeting of the Ministers ofSocial Affairs, and in ECOFIN. Finally, the findings will be collectively endorsed by theEuropean Council. Mr ŠEFČOVIČ called on national Parliaments, as the Commission’s‘key allies’, to continue their active work in that field and to discuss the findings. In hisopinion, COSAC should also be involved in this process.

Improvement of economic governance.

Mr ŠEFČOVIČ reminded that meetings ofECOFIN and a summit of the heads of the states of the eurozone had secured an agreementdefining the Euro Plus Pact. Referring to the package of six legislative proposals aimed atenhancing economic governance at the EU level, he said that it was being intenselynegotiated in trilogue meetings, and that solutions to outstanding issues were expected inJune. He described the package as a ‘toolbox’ providing new rules for governing theEuropean economy. Mr ŠEFČOVIČ went on to stress the need to unleash the potential ofthe Single Market, as there were still 27 markets in sectors such as services or trade inenergy resources. That was why the Commission proposed the Single Market Act,composed of 12 initiatives, aimed at fully exploiting the potential of the 500 millioncitizens' market.

Referring to the proposal for a Council directive on a Common Consolidated Corporate TaxBase (CCCTB) he said that the Commission had received 9 reasoned opinions totalling 13votes stating that the draft directive does not comply with the principle of subsidiarity, whileanother 4 opinions were very supportive of the proposal. He went on to explain that the draftdirective was a response to calls from big businesses that wanted to have one single marketinstead of 27. Moreover, in the opinion of the Commission, the measure could encouragecross-border business activity, be beneficial not only to big multinational companies but also tosmall and medium enterprises that use the Single Market marginally, and finally eliminatedouble taxation. Mr ŠEFČOVIČ said that by introducing the CCCTB at the EU level, theCommission wanted to exonerate Member States, and that the aim was not to imposeharmonised tax rates or to infringe upon the sovereignty of Member States. He added thataccording to the Commission tax competition among Member States in a healthy frameworkwas helpful to the European economy.1

Regarding the Multiannual Financial Framework (hereinafter referred to as "MFF"), MrŠEFČOVIČ noted that Commission President BARROSO received five letters from MemberState leaders asking to freeze the EU budget for the period after 2013. He reminded that the EUbudget was relatively small – 122.9 billion euro in 2010, representing approximately 1% of theUnion's GDP. He added that only 5.7 % of this amount was spent on administration, while therest, i.e. more than 94 % found its way back to the Member States through various programmesbringing added value to European citizens. Mr ŠEFČOVIČ called on national Parliaments tobear this in mind when discussing the next MFF. He added that in the next MFF should focusmore on programmes yielding better results, and directly relating to the goals of the Europe2020 Strategy. Moreover, initiatives financed within the MFF should not duplicate efforts ofMember States which should treat the EU budget as a ‘springboard’. He also emphasised theimportance of innovative financing, e.g. via project bonds, and of involving the private sector,thus increasing the leverage needed to improve infrastructure.Mr ŠEFČOVIČ went on to say that the combined efforts of EU institutions and Member Stateswere needed to simplify programs. Commissioners were often told in Member States that moremoney and fewer rules were needed. The Commission would present a new ambitious proposalto that effect.On cooperation with COSAC, Mr ŠEFČOVIČ said that he appreciated the new mode ofdiscussion and the fact that highly political and relevant topics were debated in COSACmeetings. He stated that COSAC could be used for discussing cross-cutting European issuessuch as the Europe 2020 Strategy and the EU budget. He added that the Commissionwelcomed the discussion on the annual Commission Work Programme and would like to havea discussion on the national Parliaments' priorities for 2012 in the autumn.During the ensuing debate 31 speakers took the floor. Many brought up the issue of theCCCTB. Some voiced concerns about the draft directive circumventing the Treaties andwarned against adopting new legislation too speedily. It was also argued that the EU had nocompetence in the area of corporate tax. One delegation brought up the 2001 Ernst & Youngstudy on CCCTB which concluded that the proposed tax might translate into higher taxes forcompanies and undermine small and medium enterprises. While other participants favoured theinitiative, they also warned that the measure might infringe upon the tax sovereignty ofMember States, thus curbing their economic growth. It was also suggested that the taxfavoured larger countries and might be detrimental to the smaller ones. One participantmentioned the possibility of introducing a European Transaction Tax.Some speakers stressed that the crisis had started outside Europe and that the EU was not toblame for the ensuing financial turmoil, the more so the crisis did not weaken the commoncurrency. It was also suggested that the recent budgetary problems of some Member States thatwere among the biggest beneficiaries of the cohesion funds, could to some extent have beentriggered by considerable financial transfers from the EU. There was a general consensusamong participants that in order to overcome the crisis Member States must cooperate, also bypromoting necessary, innovative measures approved at the EU level, such as the economicgovernance package.It was suggested that the interparliamentary dialogue on economic governance betweennational Parliaments and the European Parliament should be further reinforced, creating acounterpart for the Council representing intergovernmental dimension.

Other points raised by speakers included the investment in the Danube Strategy, project bonds,Eurobonds, the need to reform direct payments to farmers and the promotion of the SingleMarket. It was mentioned that new ambitious greenhouse emissions targets could jeopardizethe prospects of economic growth.With respect to the Europe 2020 Strategy, it was widely agreed that appropriate funding wasneeded to support its targets, as otherwise they were unlikely to be met. Various speakersunderlined the need to address the issue of poverty and to give more weight to the socialdimension.As for the European Semester, some participants stressed the need for a more proactive stanceof national Parliaments, as for the time being the governments were the dominant players.Various speakers from Greece talked about the lack of solidarity and cohesion in the EuropeanPolitics.In his reply, Mr ŠEFČOVIČ reiterated the need to restore hope, especially in the countriesworst afflicted by the crisis. As for crisis management, he pointed out that although the EU wasthe closest international union, there was a strong need for further cooperation between theMember States. He hoped that the economic governance would become a new stage ofEuropean integration such as the Schengen area and the eurozone. He went on to say that oneway to cope with the crisis was revitalising the Single Market. He stressed that somechallenges such as the economic crisis, demographic problems, and ensuing problems withpension systems as well as illegal immigration could best be dealt with at the EU level.However, some of them such as the European Stability Mechanism understandably entailedlong negotiations among Member States, as large sums were involved.Mr ŠEFČOVIČ warmly welcomed the idea of discussing budgetary issues by nationalParliaments and the European Parliament, adding that the Commission sometimes found itdifficult to understand why political positions of the very same parties differed considerablydepending on the level at which they were voiced: the national or the European.Referring to the austerity programmes, the Vice-President of the Commission said that noprogress could be achieved unless the economies of the Member States were put in order. Hewent on to say that at present, too much money was being spent on interest rates, and that someMember States were at the mercy of financial markets and speculators. It was remarkable thatsome countries of the eurozone such as Portugal and Ireland had their ratings compared to thatof Egypt. Hence, the Commission deemed it necessary to have a closer look at the ways therating agencies operated, and would put forward a legislative proposal on the issue.With regard to cohesion funds, the Vice-President acknowledged that future spending shouldbe better targeted and should not focus exclusively on infrastructure. More specifically, hestressed the importance of investing in high-quality education and in a good environment forbusiness in order to promote competitiveness. As to the latter aspect, Mr ŠEFČOVIČ assuredthat the Commission was ready to reduce the administrative burden by 30 % by 2012, butstressed that the overall effect depended largely on the reforms to be implemented at thenational level.

On the Europe 2020 Strategy, he noted that the targets set by the Commission were often veryambitious, and that its success depended on the contributions of Member States. This being thecase, he called on Members of Parliaments to exert more influence on their respectiveministers.As for the MFF, Mr ŠEFČOVIČ informed that the Commission did not plan to increase thebudget and intended to use contributions from Member States instead. He indicated that theCommission would put forward a proposal for financing the MFF encompassing innovativefinancing platforms with such tools as project bonds, and added that the Commission wanted touse the expertise of the private banking sector. As for Eurobonds, he said a better climate wasneeded. Research and development, common agricultural policy and cohesion policy wouldremain the three main domains to be financed within the MFF. On common agricultural policy,he commented that historic references in direct payments would have to be addressed and amore just solution would have to be found. He added that payments should be given only toactive farmers.Addressing the issue of the CCCTB, Mr ŠEFČOVIČ said that the Commission had doubtsabout the 2001 Ernst &Young study and had carried out an impact assessment that yieldeddifferent conclusions, especially concerning employment. He added that companies withbranches in other countries would not be stripped of their profits by the CCCTB.With regard to the Danube strategy, Mr ŠEFČOVIČ drew attention to the successfulimplementation of the Baltic Sea Strategy and pointed out that a better macro-economicalstrategy was needed in order to identify financial resources that should be mobilised to createsynergies.On energy and environmental issues, the Vice-President said that the Commission wouldpresent a legislative proposal for fairer taxation of renewables and clean energy fairer, andacknowledged that the EU was lagging behind as far as the 2020 climate targets wereconcerned. He said that new binding targets would be introduced.With reference to the situation in Greece, he underlined that fiscal adjustment achieved so farwas unprecedented and amounted to 7 % of GDP in one year. As Greece still fell short ofmeeting the requirements, the Greek authorities should launch a privatization programmewithout delay. Mr ŠEFČOVIČ said that a stronger political consensus would help the countryresolve the problem and recalled the example of Latvia that had managed to completely turnaround the situation in a very short time expecting 3 % growth this year.

4. Technical modifications of the Rules of Procedure of COSAC

The Hungarian Presidency presented a consolidated version of the Rules of Procedure of COSACwhich was sent to all national Parliaments and the European Parliament on 26 May 2011. Thisproposal included only technical amendments, leaving substantive amendments to the incomingPolish Presidency.Although the Hungarian proposal had been generally supported at the meeting of the Troika ofCOSAC on 29 May 2011, the delegation of the European Parliament signalled at the start of thedebate that it wanted to have Article 9 of Protocol 1 attached to the Treaty of Lisbon mentioned inpoint 1.2 of the Rules of Procedure, next to Article 10 of Protocol 1. Indeed, whereas Article 10

explicitly deals with the competence of COSAC including the possibility for COSAC to organiseinterparliamentary conferences on common foreign and security policy, including commonsecurity and defence policy, Article 9 deals with the broader issue of interparliamentarycooperation between the European Parliament and national Parliaments. This proposal of thedelegation of the European Parliament to have both articles mentioned in point 1.2 of the Rules ofProcedures of COSAC was opposed by most of national Parliaments that took the floor, as theyconsidered that mentioning Article 10 was sufficient.An animated debate followed during which the limited competences given by the Treaties to theEuropean Parliament in the area of common foreign and security policy and common security anddefence policy were emphasised by some national Parliaments, suggesting,inter alia,that theEuropean Parliament wanted to increase its influence in this area by including a reference toArticle 9. In this regard, reference was made to the extensive and non-conclusive debate on theissue held during the Speakers' Conference on 4-5 April 2011 in Brussels. As no consensus on theamended Rules of Procedure of COSAC could be found, the debate was postponed until thefollowing day.After an additional exchange of views the next morning a compromise was reached based onproposals of the Luxembourg and the Belgian delegations. In order to avoid that only Article 10 ofProtocol 1 would be explicitly mentioned, which had been the main point of contention for theEuropean Parliament, it was proposed to refer generally to the Treaty of Lisbon. The proposal, asamended was accepted.Once translated into all official languages of the EU, the amended Rules of Procedure of COSACas adopted by the XLV COSAC in Budapest will be published in the Official Journal of the EU.They will come into force on the day of their publication in the Official Journal of the EU.

5. Report on the Proceedings of the Conference of Speakers of EU Parliaments

Introduction by Mr Richárd HÖRCSIK, Chairman of the Committee on European Affairs of theHungarianOrszággyűlés.Mr André FLAHAUT, Speaker of the BelgianChambre des représentants,cancelled hisparticipation on the planned presentation of the outcome of the Conference of Speakers of theParliaments of the European Union (hereinafter referred to as "the Speakers' Conference") whichtook place in Brussels on 4-5 April 2011.Pursuant to the agreement reached during the meeting of the Troika, Mr Richárd HÖRCSIKsketched the outcome of the meeting of the Speakers’ Conference. Firstly, Mr HÖRCSIKreminded the participants that the Speakers’ Conference is the highest political forum on which thenational Parliaments and the European Parliament meet. He recalled that the latest meeting of theSpeakers’ Conference had been held in the BelgianChambre des représentantson 4-5 April 2011.Subsequently, he outlined the programme of the Speakers’ Conference and the PresidencyConclusions. Regarding the latter, he emphasised that agreements were reached on the role of theParliaments in the monitoring of the area of freedom, security and justice (i.e. parliamentaryoversight of the security and intelligence services and the monitoring of Europol’s activities).Lastly, he informed that agreements were equally reached on a number of points regardingparliamentary scrutiny of the common foreign and security policy, including common security and

defence policy (hereafter referred to as "CFSP/CSDP"). Nonetheless, an overall consensus on thisissue had turned out to be impossible. The Speakers’ Conference had therefore invited the PolishPresidency of the Conference to take the issue further.During the ensuing debate, 14 delegates took the floor. Some of them stressed the urgent need foran interparliamentary body, albeit that diverging opinions were expressed on its composition andtasks. However, one delegate reminded of the intergovernmental character of the matter byreferring to the Treaty on European Union and to the Declaration (No. 14) concerning the commonforeign and security policy. Other delegates reiterated the proposals of their respectiveParliaments/Chambers on the numerical composition of delegations to this body.Several delegates called on the Polish Presidency of the Speakers’ Conference not to drop the issueand to organise a conference on CFSP/CSDP. In this framework, a participant warned againstconfusing the Polish EU Presidency in 2011 with the Polish Presidency of the Speakers’Conference in 2011-2012 and encouraged the Polish EU Presidency to convene the first meeting ofthe conference in the course of the second semester of 2011.Other delegates referred to the possible role of COSAC in general and to the Contribution of itsXLIV meeting in Brussels on 24-26 October 2010 in particular which states that COSAC wishesthat the new mechanism for parliamentary oversight of the CSDP be put in place during 2011.Mr HÖRCSIK closed the debate by stating that, as shown by the exchange of views, the issue ofCFSP/CSDP will definitely resurface in upcoming COSAC meetings.

6. General policy debate on the State of the Union

Keynote speaker: Mr György SCHÖPFLIN, Member of the European Parliament, Jean Monnetprofessor.Mr HÖRCSIK welcomed Mr SCHÖPFLIN, whom he considered to be a living example ofEuropean integration. He reminded the audience that Mr BARROSO, President of theCommission, had delivered the very first "State of the Union" address before the EuropeanParliament in September 2010 and said that he was looking forward to Mr SCHÖPFLIN'S answerto the question that was also the title of his State of the Union address: "Quovadis Europa?"Mr SCHÖPFLIN started his analysis of the current situation by stating that Europe seemed to bepulling in two directions. Whereas the Treaty of Lisbon had given the EU institutions aconsiderable boost, we were also witnessing growing euroscepticism and an increasing focus onthe interest of an individual Member State at the expense of the European interest. This dualismcould be observed in various fields, and solidarity suffered as a result of national interestoverriding the European interest.He then concentrated on the rise in intergovernmentalism, with Europe countries competing formarkets, investment opportunities, prestige and power. One should not ignore warning signs of aweaker common perspective on Europe and a weakening commitment to Europe. According to MrSCHÖPFLIN the rise of intergovernmentalism was a potential threat to the European integrationprocess as a conflict resolution mechanism. Intergovernmentalism that was not underpinned by thecommunity method would find it difficult to guarantee the stability and democracy that had beenthe keys to Europe's success, he warned.

It was widely acknowledged that euroscepticism was on the rise. Mr SCHÖPFLIN pointed out thatsome eurosceptics were straightforward nationalists, while others rather articulated a more anti-bureaucratic commitment. Yet others saw the EU as an obstacle to the ideal of a Europe entirelyopen to globalisation, without any barriers. While positions of eurosceptics could be miles apart,they could and did make common cause when the need arose.Mr SCHÖPFLIN also drew attention to the impact of the current economic crisis on attitudestowards Europe. Some people, in particular disenchanted youngsters, would certainly be temptedto radicalise, most probably to the right and far right, as left radicalism was wearing out and losingits attractiveness. He added that radicalism to the right was almost invariably hostile to theEuropean integration project.Focusing on the role of the media, Mr SCHÖPFLIN was puzzled by the extreme reluctance orinability of the media to recognise the European Union as an autonomous site of power. Politicaljournalism ought to find the EU exciting for its own sake, but this seldom happened. Instead, EUpolitics was regularly interpreted by journalists as a conflict of interests between the EU and anindividual Member State. Mr SCHÖPFLIN insisted that one of the tasks of the media in ademocracy was to translate power and the working of institutions to public opinion. Yet, this washardly ever the case when it came to the European level. Regrettably, there was a strong tendencyto describe whatever happens in Brussels as a contest between the Member State involved and theso-called remote and impenetrable bureaucracy in Brussels. This was weakening the image andlegitimacy of the European integration process, while the EU itself found it difficult to counteract.The economic crisis and the use of stereotypes compounded the problem.It was clear that the classical model of democratic politics had changed and that political powerwas now both fragmented and dispersed. Information was now more readily available thanks to theInternet and party politics had become less relevant, but this also paved the way for moreradicalisation and for the EU being an obvious target. However, Mr SCHÖPFLIN also criticisedthe political class in the Member States for the loss of political significance of the integrationprocess, observing a clear tendency to take the EU and its achievements for granted. In this contextit was seldom explained to citizens why a particular competence was transferred to Brussels.Elaborating on the issue of European citizenship, Mr SCHÖPFLIN highlighted that very fewpeople were conscious of their European political identity. Citizens frequently lacked informationon European issues and saw their primary, if not exclusive, political loyalty to the state level.Ironically, in sociological and cultural terms Europeans were today far more alike and had farmore in common than 50 years ago. The cement was international English, the "new Esperanto",with Europe coming together in the Eurovision song contest. This cultural Europe, however,lacked political content, consciousness and identity.As regards migration Mr SCHÖPFLIN stated that resistance had taken on an anti-European,eurosceptic quality. It was clear that a considerable number of voters wanted to see an end tounrestricted immigration, blaming both the EU and the political elites. This might be a populistmessage, but it had resonance.Winding up his address, Mr SCHÖPFLIN acknowledged that he had concentrated on the negativetrends. However, by identifying the processes that were sapping the commitment to Europeremedies became feasible. In essence it boiled down to the question whether there was politicalwill to recreate a European consciousness and to relaunch the idea of a European interest that isbeneficial to Member States. It was not by chance that the Hungarian Presidency had chosen the

slogan "Strong Europe", and the past months had shown that despite the problems building astrong Europe was indeed possible.During the ensuing debate 22 speakers took the floor. Numerous delegates explicitly praised MrSCHÖPFLIN for his analysis. A range of issues and concerns were addressed in direct response topoints raised by the keynote speaker.Speakers stressed the need for more cooperation, solidarity and a social Europe. It was importantto make Europeans feel more European, and a single European electoral law and pan-Europeanelections were mentioned as ways to achieve this. There was a need to put citizens in the centre, toconvince them that there is an integration project that they can relate to and to create a newEuropean identity. One speaker saw an important role for COSAC to reduce the democratic deficit.Issues like high levels of unemployment and immigration were identified as underlyingeuroscepticism, as they raised doubts in people's minds. Many speakers spoke of the critical phasethat Europe found itself in, characterised by a confidence crisis and increasing self-centeredness.The importance of continuing the European integration process was broadly acknowledged. Somespeakers underlined that the enlargement policy had been the most successful policy of the EU.Support was expressed for finalising accession negotiations with Croatia, which would encourageother countries in the region to continue their efforts. Foreign relations should be further boosted,and one speaker insisted on better cooperation between the European External Action Service andthe Member States.Several speakers addressed the issue of migration, underlining,inter alia,that the Mediterraneancountries were the southern border of the Schengen area, that the problem of migration fromNorthern Africa should be dealt with by the EU as a whole and that FRONTEX should acquire amore significant role and be more transparent and independent.Other speakers highlighted the importance of a single European energy market, the need to putrenewables more prominently on the European agenda and the necessity of guaranteeing goodgovernance and scrutinising the banking system.Mr SCHÖPFLIN thanked the speakers for the rich debate. On enlargement he agreed that this hadin many ways been a very successful policy and that it was an on-going process. Migration was nota purely economic process in terms of "adding to the labour force", but a much wider, multifacetedphenomenon. Regarding the economic crisis, Mr SCHÖPFLIN reiterated that we should beprepared for the population to become more radical. The gap between the people and the elites waswidening and the effort to reconnect was a task for all of us. He concluded by stating that no onehad the monopoly of the definition of euroscepticism and that democracy and stability could not beguaranteed without a commitment to Europe.

7. Debate and adoption of the Contribution and Conclusions of the XLV COSAC

On 17 May 2011, two weeks before the XLV COSAC meeting, the Hungarian Presidency ofCOSAC put forward a text of draft Contribution and Conclusions of the XLV COSAC meeting.The Presidency invited COSAC delegations to table amendments to the two drafts until 24 May2011. On 26 May 2011, the Presidency informed COSAC delegations about the receivedamendments which it had grouped in a table that was made available in English and French

MINUTES OF THE MEETING OF THE XLV COSAC

Budapest, 30-31 May 2011

AGENDA:

1. Welcome address and procedural matters

2. State of play of the Hungarian Presidency of the Council of the European Union

3. The way to recovery: Economic governance, Europe 2020 Strategy and European

Semester

4. Technical modifications of the Rules of Procedure of COSAC

5. Report on the Proceedings of the Conference of Speakers of EU Parliaments

6. General policy debate on the State of the Union

7. Debate and adoption of the Contribution and Conclusions of the XLV COSAC.

1. Welcome address and procedural matters

2. State of play of the Hungarian Presidency of the Council of the European Union

3. The way to recovery: Economic governance, Europe 2020 Strategy and European

Semester.

Fundamental and comprehensive reforms of the financial system.

Increasing European competitiveness,

Improvement of economic governance.

4. Technical modifications of the Rules of Procedure of COSAC

5. Report on the Proceedings of the Conference of Speakers of EU Parliaments

6. General policy debate on the State of the Union

7. Debate and adoption of the Contribution and Conclusions of the XLV COSAC