President Prodi: The European Commission monitors with great attention the development of an information society where the constant, astounding progress of technology gives birth to new, innovative services almost every day. Unfortunately, it also gives rise to unanticipated forms of "cyber-crime." Of course, cyber-terrorism is seen as a serious problem for member states, especially in the wake of the terrorist attacks against the United States, and we are acutely aware of its possible implications in terms of civil liberties and security.

Our information highways should not offer new opportunities to blackmailers and criminals. At the same time, our concern for security should not push us to introduce excessively stringent controls, which could stifle the computer revolution, undermine its beneficial effects, or run against our commitment to ensure the protection of fundamental rights and freedoms, which are the essential aspects of our democratic societies.

The advances of new technologies enormously increase the possibility of remotely controlled crime and terrorism. We must prevent hackers from interfering with systems of crucial importance to our societies, such as the computer networks of public utilities, dams, nuclear power plants, air traffic control, hospitals, banks and public institutions. This is made particularly difficult by the cross-border nature of the "hacktivist" threat. A mix of legal and technical measures will be required to protect our societies from the so-called "weapons of mass disruption." The European Commission has been active on both fronts, especially since the extraordinary European Council held in Tampere (Finland) in October 1999. Our proposals include a common definition of cyber-crime, with appropriate enforcing procedures. Police forces will have to be trained to combat this insidious enemy and to neutralize it by blocking or thwarting its financial movements. This will imply enhanced cooperation between law enforcement agencies throughout Europe and all over the world, even at the price of reduced secrecy for bank accounts.

The EU Ministers of Justice and Home Affairs, meeting in Brussels after the terrorist attacks of Sept. 11, adopted a set of measures aimed at improving the fight against all forms of terrorism. In particular, they envisaged the creation of multinational investigation teams and joint initiatives against the use of the banking system for the transfer of terrorist-related funds and the proceeds of drug trafficking. In addition, our existing and proposed data-protection legislation allows us to take the necessary steps for law-enforcement at the national level. They are, of course, constrained by the criteria laid down in the Charter of Fundamental Rights and the European Convention on Human Rights.

The EU, like any other democracy, must find the right balance between civil liberties and security. The need to guarantee a high level of security should not be seen as a reason for unnecessarily limiting the freedom of our countries or the privacy of European citizens. We will have to use all our ingenuity, but I'm sure we will succeed in conducting a policy of openness without exposing ourselves to the new forms of terrorism.

In today's rapidly changing market, Europe needs a new regulatory framework for electronic communications networks and services. The main objective is to create a single European market for electronic services by harmonizing the existing rules.

The Lisbon European Council of March 2000 highlighted the potential of the shift to a digital, knowledge-based economy in terms of growth, competitiveness and job creation. The new policy framework needs to take these developments into account, in particular the convergence between telecommunications, broadcasting and IT sectors. Our objective is to reinforce competition in all market segments while ensuring continued protection of basic consumer rights.

In order to ensure legal certainty in the transition from the current to the new regulatory framework, it is anticipated that five new directives (framework, access, authorization, universal service and data protection) will enter into force on the same date. It will be the beginning of consumer protection in the European information society.

As far as Internet taxation is concerned, the Commission proposed a directive to modernize the value-added tax (VAT) system on software, videos, computer games and music downloaded from the Internet. The plan would create a level playing field between EU and non-EU providers. It would require third-country companies selling in the EU to register in at least one member state and to collect a tax for payment to the national administration in question.

President Prodi: The Commission actively encourages investment in training programs for a better information society in Europe. Europe's education and training systems need to adapt both to the demands of the knowledge society and to the need for an improved level and quality of employment.

Research activities at the national and EU level must be better integrated and coordinated to make them as efficient and innovative as possible and to ensure that Europe offers attractive prospects to the best and brightest young professionals from the member states and from abroad.

In particular, the EU must develop appropriate mechanisms for networking national and joint research programs, and create a better environment for investment in private research and R&D partnerships by using tax policies, venture capital and European Investment Bank (EIB) support. We are also committed to facilitate the creation, in 2002, of a very high-speed trans-European network for electronic communications, linking research institutions, universities, libraries, scientific centers and schools.