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Health and Consumer Protection

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Address by Under-Secretary Ulrich Geisendörfer, Federal Ministry for Economic Affairs and Technology, to the assembly of European consumer unions (Brussels, 12 November 1998)

Community consumer policy during the 1999 German Presidency

Thank you for the invitation to speak to you here today about Germany's consumer policy ideas for its Presidency of the European Community.

I am delighted to be able to address you, the representatives of the consumer organisations.

In a market economy, consumer organisations fulfil a number of very important functions:

In the maze of individual interests, the voice of the consumer must remain heard. Furthermore, the commitment and initiative of private associations, if they are well organised and properly structured, can achieve better results in terms of providing consumer information than official action by the authorities.

As an example, I would mention the active role of consumer organisations vis-à-vis the trade associations in connection with the drafting and agreeing of voluntary commitments concerning pricing on introduction of the euro.

On this basis, it will remain the task of the consumer organisations to observe the effectiveness of these agreements and, where necessary, to continue to represent consumer interests.

I am particularly pleased to see here today the representatives of the consumer associations of our neighbouring countries which have applied for membership of the Community. If our markets are to grow together, we must also work together in the field of consumer policy and in terms of the activities of the consumer organisations.

The government policy statement by the newly elected Federal Chancellor is only two days old. Today in Bonn, the Bundestag is debating the economic and social policy aspects of this statement.

This means I cannot yet provide a detailed analysis of the new German government's consumer policy, but I can describe the initial signals.

The new government will pursue a more active consumer protection policy:

- It intends to improve consumer information and consumer representation.

- It remains committed to protecting consumers from health hazards, and puts a premium on preventive health protection for consumers.

- It intends to strengthen the legal position of consumers, particularly with regard to their economic interests.

Consumer policy will thus constitute an increasingly important part of our policy.

We continue to see consumer policy mainly as an economic policy task, which is why the Federal Minister for Economic Affairs will again represent Germany at meetings of the "Consumer Affairs" Council.

In the same way as at national level, the German government supports an active consumer policy at Community level.

As far as consumers are concerned, the European internal market already offers a new dimension and vitality.

This development will be further accelerated by the introduction of the euro as a common currency.

And on top of all this comes the development of electronic media for the marketing of consumer products and services.

As far as the German Presidency is concerned, we are also taking guidance from the revised consumer policy provisions in the Amsterdam Treaty (Article 153), which refer to promoting the interests of consumers and ensuring a high level of consumer protection.

The Commission will soon present its action plan on consumer policy for the period 1999-2001 .

We intend to help ensure that the Council supports the Commission wherever it shares its goals and plans.

If the Council would like to see more far-reaching Commission initiatives or would like other matters to be placed on the agenda, it should say so.

Above all, the Council should endeavour to ensure that the Commission's consumer policy activities support and complement Member States' policies in the areas in which it regards this as particularly necessary.

We also support the Commission's endeavours to take account of consumer policy requirements in the preparation and implementation of other Community policies, in line with the Amsterdam Treaty. Examples here include the further development of the media society and electronic trade, environment policy and energy policy.

The German government also supports the creation of the general framework for Community activities in favour of consumers, which was discussed in detail by the Council on 3 November. We too want the Commission to be provided with a general legal basis for its consumer policy activities and for budgetary expenditure as part of the general framework.

The Austrian Presidency has made a considerable effort to achieve a decision on this matter, and it would still appear possible for a final decision to be reached on schedule, i.e. by the end of the year.

Consumer safety and health protection will remain a priority task of the Community under the German Presidency, just as it remains a priority task of the Member States.

In this specific area, the Commission has made a special effort to carry out its duties in a manner which supports consumer interests.

There is no doubt that the number of tasks in this area has increased in recent years. As a result, Community spending on consumer health protection has risen significantly over the past year.

We accept that this is necessary.

However, we cannot compensate simply by increasing the budget allocation, as the very strict political framework for the overall development of the Community budget leaves very little room for an increase in consumer policy spending.

Unfortunately, the outcome is that fewer resources are available for other consumer policy tasks than in previous years.

(This concerns protection of consumers' economic interests at Community level, as well as consumer representation and information).

As a result, it is all the more essential for the most important tasks serving the interests of consumers to be performed even with extremely tight financial resources.

For these reasons we must combine a clever legislation policy designed to protect the health and economic interests of consumers with effective representation of consumer interests and with consumer information methods which are as economical as possible.

In the field of general product safety, we are still waiting for the Commission's report, on the basis of which the Council will consider the possibility of adapting the Directive.

There seems to be a general wish for the scope of this Directive and its links with a series of specific Directives to be made clearer and more transparent.

The question of the safety of services in conjunction with products will require an intensive examination.

The German Presidency will endeavour to deal with these matters thoroughly and to work towards an improved information system and closer cooperation between the management authorities.

Concerning the protection of consumers' economic interests, we must consistently ensure that the legal framework is sufficient to allow consumers wherever possible to defend their own economic interests on the markets.

At the same time we must ensure that consumer transactions are made easier. Likewise the operation of markets, also in the interest of consumers.

Among the legislative tools available to achieve these goals, I feel, in principle, that civil law provisions are more appropriate, from the market economy point of view, than administrative injunctions and bans directed at companies. This is because civil law provisions are more flexible, giving the parties concerned more scope for responding to the many different market situations and interests.

They also serve to boost consumer independence and reduce the cost of enforcement by the authorities.

Concerning the protection of consumers' economic interests in the internal market, the Community, in recent years, would appear to have initiated the most important legislative steps.

However, a number of tasks remain:

The proposal for a Directive on the sale of consumer goods and associated guarantees has yet to be finalised. The German Presidency will approach this task in a pragmatic manner with a view to seeking a solution.

The Commission has recently tabled a proposal for a Directive on consumer protection in conjunction with contracts covering distance selling of financial services.

The German Presidency will endeavour to make progress with this matter at Council level.

However, the legal and economic policy difficulties in this field should not be underestimated.

We are also considering placing consumer protection in conjunction with insurance contracts on the Council's agenda.

Today and tomorrow, the Austrian Presidency is holding a special seminar on this complex of questions. The Commission is also working on the subject, and the relevant issues are being discussed in Germany and presumably in several other Member States.

Perhaps the period of the Germany Presidency is a suitable time to attempt a provisional appraisal within the Council with a view to deciding whether more should be done for consumer protection and, if so, how this can be achieved without excessively interfering with the freedom of insurance intermediaries.

I fear that administrative rules on professional practice in this sphere, particularly at Community level, would be too cumbersome. There would be problems from the point of view of compatibility with national legal and financial systems and it would be particularly difficult for the authorities to carry out proper monitoring, particularly in the case of cross-border transactions.

The first thing to look into, as far as I am concerned, is whether the legal status of consumers in the face of undesirable practices by intermediaries can be strengthened using civil law provisions, such that consumers can to a large extent protect their own economic interests.

From this example you can see the fundamental approach of German consumer policy, which we intend to apply to the task of presiding over the Community.

In open and dynamic markets, it will be important at all times to pay attention to whether the market position of consumers is strong enough and to whether markets are sufficiently transparent for consumers, or whether additional measures are necessary and justifiable without unnecessarily restricting the functioning of the markets.

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